CIVIL CODE OF THE PHILIPPINES
BOOK II
PROPERTY, OWNERSHIP,
AND ITS MODIFICATIONS
Title I. — CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS
(1) Definition of ‘Property’ in the Civil Code
Under the Civil Code, property, considered as an object,
is that which is, or may be, appropriated. (See Art. 414).
(2) Definition of ‘Property’ as a Subject in a Law Course
Considered as a subject or course in law, property is that
branch of civil law which classifies and defines the different
kinds of appropriable objects, provides for their acquisition and
loss, and in general, treats of the nature and consequences of
real rights.
[NOTE: Every right (derecho) has two elements — subjects
(persons) and objects (properties). Since Book I of the Civil
Code deals with Persons, it is logical that Property should be
the subject matter of Book II.].
(3) ‘Thing’ Distinguished from ‘Property’
As used in the Civil Code, the word “thing” is apparently
SYNONYMOUS with the word “property.’’ However, technically, “thing” is broader in scope for it includes both appropriable and non-appropriable objects. The planets, the stars,
the sun for example, are “things’’ (cosas), but since we cannot
appropriate them, they are not technically “property” (bienes).
Air, in general, is merely a “thing,” but under certain condi1
CIVIL CODE OF THE PHILIPPINES
tions, as when a portion of it is placed in a container, it may
be considered as property.
[NOTE: Property involves not only material objects but
also intangible things, like rights or credits.].
(4) Classification of Things
There are three kinds of things, depending on the nature
of their ownership:
(a)
res nullius (belonging to no one)
(b)
res communes (belonging to everyone)
(c)
res alicujus (belonging to someone)
Res Nullius
These things belong to no one, and the reason is that they
have not yet been appropriated, like fish still swimming in the
ocean, or because they have been abandoned (res derelictae) by
the owner with the intention of no longer owning them. Other
examples include wild animals (ferae naturae), wild birds, and
pebbles lying on the seashore.
Res Communes
While in particular no one owns common property, still
in another sense, res communes are really owned by everybody
in that their use and enjoyment are given to all of mankind.
Examples would be the air we breathe, the wind, sunlight, and
starlight.
Res Alicujus
These are objects, tangible or intangible, which are
owned privately, either in a collective or individual capacity.
And precisely because they can be owned, they really should
be considered “property.” Examples: your book, your shares of
stock, your parcel of land.
(5)
Classification of Property
Properties may be classified from different viewpoints.
Among the most important bases are the following:
2
CIVIL CODE OF THE PHILIPPINES
(a)
(b)
(c)
(d)
Mobility and non-mobility
1)
movable or personal property (like a car)
2)
immovable or real property (like land)
Ownership
1)
public dominion or ownership (like rivers)
2)
private dominion or ownership (like a fountain
pen)
Alienability
1)
within the commerce of man (or which may be the
objects of contracts or judicial transactions)
2)
outside the commerce of man (like prohibited
drugs)
Existence
1)
present property (res existentes)
2)
future property (res futurae)
[NOTE: Both present and future property, like
a harvest, may be the subject of sale but generally
not the subject of a donation.].
(e)
Materiality or Immateriality
1)
tangible or corporeal (objects which can be seen or
touched, like the paper on which is printed a P1,000
Bangko Sentral Note)
2)
intangible or incorporeal (rights or credits, like
the credit represented by a P1,000 Bangko Sentral
Note)
[NOTE: The Philippine peso bills when attempted to be exported may be deemed to have been
taken out of domestic circulation as legal tender,
and may therefore be treated as a COMMODITY.
Hence, bills carried in excess of that allowed by the
Bangko Sentral may be forfeited under Sec. 1363(f) of
the Revised Administrative Code. (Commissioner of
Customs v. Capistrano, L-11075, June 30, 1960).].
3
Art. 414
(f)
(g)
(h)
(i)
CIVIL CODE OF THE PHILIPPINES
Dependence or Importance
1)
Principal
2)
Accessory
Capability of Substitution
1)
fungible (capable of substitution by other things of
the same quantity and quality)
2)
non-fungible (incapable of such substitution, hence,
the identical thing must be given or returned)
Nature or Definiteness
1)
generic (one referring to a group or class)
2)
specific (one referring to a single, unique object)
Whether in the Custody of the Court or Free
1)
in custodia legis (in the custody of the court) — when
it has been seized by an officer under a writ of attachment or under a writ of execution. (De Leon v.
Salvador, L-30871, Dec. 28, 1970).
2)
“free’’ property (not in “custodia legis’’).
(6) Characteristics of Property
(a)
utility for the satisfaction of moral or economic wants
(b)
susceptibility of appropriation
(c)
individuality or substantivity (i.e., it can exist by itself,
and not merely as a part of a whole). (Hence, the human
hair becomes property only when it is detached from the
owner.)
Article 414. All things which are or may be the object of
appropriation are considered either:
(1)
Immovable or real property; or
(2)
Movable or personal property.
4
CIVIL CODE OF THE PHILIPPINES
Art. 414
COMMENT:
(1) Importance of the Classification of Property Into Immovables and Movables
The classification of property into immovables or movables
does not assume its importance from the fact of mobility or
non-mobility, but from the fact that different provisions of the
law govern the acquisition, possession, disposition, loss, and
registration of immovables and movables.
Examples:
(a)
In general, a donation of real property, like land,
must be in a public instrument, otherwise the alienation will not be valid even as between the parties to
the transaction. (Art. 749). Upon the other hand, the
donation of an Audi automobile, worth let us say,
P1.8 million, needs only to be in a private instrument. (Art. 748).
(b)
The ownership of real property may be acquired by
prescription although there is bad faith, in thirty (30)
years (Art. 1137); whereas, acquisition in bad faith
of personal property needs only eight (8) years. (Art.
1132).
(c)
Generally, to affect third persons, transactions involving real property must be recorded in the Registry of Property; this is not so in the case of personal
property.
(2) Incompleteness of the Classification
The classification given in Art. 414 is not complete in that
there should be a third kind — the “mixed” or the “semi-immovable.” This refers to movable properties (like machines, or
removable houses or transplantable trees) which under certain
conditions, may be considered immovable by virtue of their being attached to an immovable for certain specified purposes.
This clarification, however, does not affect the classification
indeed of properties only into two, immovable or movable; for
as has been intimated, a machine is, under other conditions,
immovable. (See 3 Manresa, pp. 9-12).
5
Art. 414
CIVIL CODE OF THE PHILIPPINES
(3) Historical Note
Under the Spanish Civil Code, immovables were referred
to as bienes immuebles, and movables as bienes muebles. Under
Anglo-American law, the terms given are “real” and “personal”
respectively. Inasmuch as our country has been influenced both
by Spanish and Anglo-American jurisprudence, the two sets
of terms have been advisedly used by the Code Commission.
Incidentally, it should be remembered that it was Justinian
who first classified corporeal property (res corporales) into immovables (res immobiles) and movables (res mobiles).
(4) Jurisprudence on the Classification
According to the Supreme Court in the case of Standard
Oil Co. of New York v. Jaranillo, 44 Phil. 630, under certain
conditions, it is undeniable that the parties to a contract may,
by agreement, treat as personal property that which by nature
would be real property. However, the true reason why the
agreement would be valid between the parties is the application
of estoppel. It stated further that it is a familiar phenomenon
to see things classed as real property for purposes of taxation,
which on general principles may be considered as personal
property.
However, it would seem that under the Civil Code, it is
only the LAW which may consider certain real property (like
growing crops) as personal property (for the purpose of making
a chattel mortgage). (See Art. 416, par. 2).
(5) ‘Reclassification’ Distinguished from ‘Conversion’
Reclassification is very much different from conversion
–– the former is the act of specifying how agricultural lands
shall be utilized for non-agricultural uses such as residential,
industrial, or commercial –– as embodied in the land use plan,
subject to the requirements and procedures for land use conversion, while the latter is the act of changing the current use of
a piece of agricultural land into some other use as approved by
the Dept. of Agrarian Reform (DAR). A mere reclassification
of agricultural land does not automatically allow a landowner
to change its use and, thus, cause the ejectment of the tenants –– he has to undergo the process of conversion before he
6
CIVIL CODE OF THE PHILIPPINES
Art. 414
is permitted to use the agricultural land for other purposes.
(Ludo & Luym Development Corp. v. Barretto, 471 SCRA 391
[2005]).
The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart
of a metropolitan area cannot by any strained interpretation of
law convert it into agricultural land and subject to the agrarian
reform program. At any rate, court proceedings are indispensable where the classification/conversion of a landholding in
duly-determined before ejectment can be effected, which, in
turn, paves the way for the payment of disturbance compensation. (Ibid.).
(6) The Human Body
Is the human body real or personal property? It is submitted that the human body, whether alive, or dead, is neither
real nor personal property, for it is not even property at all, in
that it generally cannot be appropriated. It is indeed a thing
or a being, for it exists; in fact, it is a tangible or corporeal being or thing, as distinguished from the human soul, which is
necessarily intangible or incorporeal.
While a human being is alive, he cannot, as such, be the
object of a contract, for he is considered outside the commerce
of man. He may, of course, offer to another the use of various
parts of his body, even the entire body itself in obligations requiring demonstration of strength or posing in several ways,
as when he poses for a painter or sculptor. He may donate part
of his blood, may even sell part of his hair, but he cannot sell
his body.
(7) Organ Donation Act
The “Organ Donation Act of 1991,” otherwise known as
RA 7170, as amended, was effective on Feb. 24, 1992, upon its
publication in the Official Gazette.
The law’s complete title is “An Act Authorizing the Legacy
or Donation of All or Part of a Human Body After Death for
Specified Purposes.” This means that all or part of a human
body may only occur after a person’s “death” (i.e., the irre7
Art. 414
CIVIL CODE OF THE PHILIPPINES
versible cessation of circulatory and respiratory functions or
the irreversible cessation of all functions of the entire brain,
including the brain system. (Sec. 2[j], RA 7170, as amended).
Person Who May Execute a Legacy
Said person may be “[a]ny individual, at least 18 years
of age and of sound mind may give by way of legacy, to take
effect after his/her death, all or part of his/her body for any
specified purpose.’’ (Sec. 3 read together with Sec. 6, Ibid.).
Who may Execute a Donation?
Any of the following persons, in the order of priority stated
hereunder, in the absence of any actual notice of contrary
intentions by the decedent or actual notice of opposition by a
member of the immediate family of the decedent (that includes
a still-born infant or fetus (Sec. 2[b], id.), may donate all or any
part of the decedent’s body for any purpose specified, thus:
1.
spouse;
2.
son or daughter of legal age;
3.
either parent;
4.
brother or sister of legal age; or
5.
guardian over the person of the decedent at the time
of his death. (Sec. 4[a][1-5], id.).
[NOTE: The persons authorized may make the donation
after or immediately before death. (Sec. 4{b}, id.).].
Manner of Executing a Legacy
Such may be made by a will, and with said legacy only
become effective upon a testator’s death without waiting for
probate of the will. Now, if the will is not probated, or if it is
declared invalid for testamentary purposes, the legacy, to the
extent that it was executed in good faith, is nevertheless valid
and effective. (Sec. 8[a], id.).
A legacy of all or part of the human body may also be
made in any document other than a will. The legacy becomes
8
CIVIL CODE OF THE PHILIPPINES
Art. 414
effective upon the death of the testator and shall be respected
by and binding upon the testator’s:
1.
executor;
2.
administrator;
3.
heirs;
4.
assign;
5.
successors-in-interest
6.
all members of the family. (Sec. 8[b], ibid.).
The document, which may be a card or any paper designed
to be carried on a person, must be signed by the testator in
the presence of two witnesses who must sign the document in
his presence. (Sec. 8[b], id.). As a general rule, the legacy may
be made to a specified legatee or without specifying a legatee.
(See Sec. 8[c], id.). Also as a general rule, the testator may
designate in his will, card or other document, the surgeon or
physician who will carry out the appropriate procedures. (See
Sec. 8[d], id.).
International Sharing of Human Organs or Tissues
Such “shall be made only thru exchange programs dulyapproved by the Dept. of Health. This is provided that foreign
organ or tissue ‘bank storage facilities’ and similar establishments grant reciprocal rights to their Philippine counterparts
to draw human organs or tissues at any time.” (Sec. 14, id.).
“Organ bank storage facility” refers to a facility licensed, accredited, or approved under the law for storage of human
bodies or parts thereof. (Sec. 2[a], id.).
Rules and Regulations
It is the Sec. of Health who “shall endeavor to persuade all
health professionals, both government and private, to make an
appeal for human organ donation’’ (Sec. 15[2nd par.], id.), e.g.,
kidney (See Adm. Order 41, s. 2003, Organ Donation Program
[14 NAR 3, p. 1409], re Kidney Transplantation [14 NAR, p.
314] –– “shall promulgate rules and regulations as may be
necessary or proper to[wards] [the] implement[ation] [of] this
Act.” (Sec. 16, id.).
9
Art. 414
CIVIL CODE OF THE PHILIPPINES
(8) Any Right in the Nature of Property Less than Title
PNB v. CA
82 SCAD 472 (1997)
The term “interests’’ is broader and more comprehensive
than the word “title’’ and its definition in a narrow sense by
lexicographers as any right in the nature of property less than
title, indicates that the terms are not considered synonymous.
It is practically synonymous, however, with the word “estate’’
which is the totality of interest which a person has from absolute ownership down to naked possession.
An “interest in land’’ is the legal concern of a person in
the thing or property, or in the right to some of the benefits or
uses from which the property is inseparable.
10
CIVIL CODE OF THE PHILIPPINES
Chapter 1
IMMOVABLE PROPERTY
Art. 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds
adhered to the soil;
(2) Trees, plants, and growing fruits, while they are
attached to the land or form an integral part of an immovable;
(3) Everything attached to an immovable in a fixed
manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the
object;
(4) Statues, reliefs, paintings, or other objects for use
or ornamentation, placed in buildings or on lands by the
owner of the immovable in such a manner that it reveals the
intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements
intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said
industry or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds
or breeding places of similar nature, in case their owner has
placed them or preserves them with the intention to have them
permanently attached to the land, and forming a permanent
part of it; the animals in these places are included;
(7)
Fertilizer actually used on a piece of land;
11
Art. 415
CIVIL CODE OF THE PHILIPPINES
(8) Mines, quarries, and slag dumps, while the matter
thereof forms part of the bed, and waters either running or
stagnant;
(9) Docks and structures which, though floating, are
intended by their nature and object to remain at a fixed place
on a river, lake, or coast;
(10) Contracts for public works, and servitudes and
other real rights over immovable property.
COMMENT:
(1) Definition of ‘Immovable Property’
The law does not define what properties are immovable;
they are merely enumerated. While it is true that the dictionary defines immovable property as that which is firmly fixed,
settled, or fastened, and while in general, immovable property
is that which is fixed in a definite place, still there are many
exceptions to this general criterion. The etymological meaning
should, therefore, yield to the legal or juridical significance attached to the term by the law. (See 3 Manresa 18). As a matter
of fact, the enumeration given in Art. 415 does not give an
absolute criterion as to which properties are real, and which
are personal. (See Standard Oil Co. of New York v. Jaranillo,
44 Phil. 630).
(2) Academic Classification of Real Properties
(a)
Real property by nature (like trees and plants)
(b)
Real property by incorporation (like a building)
(c)
Real property by destination or purpose (like machinery
placed by the owner of a tenement on it for direct use in
an industry to be carried on therein)
(d)
Real property by analogy (like the right of usufruct, or a
contract for public works, or easements and servitudes,
or “sugar quotas” under Republic Act 1825 and Executive
Order 873. (Presbitero v. Fernandez, L-19527, Mar. 30,
1963).
12
CIVIL CODE OF THE PHILIPPINES
Art. 415
(3) Paragraph 1: ‘Land, buildings, roads, and constructions
of all kinds adhered to the soil.’
(a)
Land is the best example of immovable property. It is
immovable by its very nature. And even if land is moved
by an earthquake, an extraordinary happening, the land
should still be considered immovable. A shovelful of land
however, should be considered personal property, since
this no longer adheres to the soil. If land is rented, it is
still immovable.
(b)
Buildings are considered immovable provided they are
more or less of a permanent structure, substantially adhering to the land, and not mere superimpositions on the
land like barong-barongs or quonset fixtures and provided
there is the intent of permanent annexation. (See Salmond,
Jurisprudence, p. 449). Note that the law uses the term “adhered’’ and not “superimposed.’’ (See Luna v. Encarnacion,
et al., 91 Phil. 531). And this is true, whether the building
is built on one’s own land, or on rented land. The reason is
clear: the law on this point does not distinguish as to who
built or owns the building. (See Ladera v. Hodges, CA, 48
O.G. 5374). It is obvious that the inclusion of “building,’’
separate and distinct from the land, in Art. 415, can only
mean that a building is by itself an immovable property.
(Lopez v. Oroso, Jr., et al., L-10817-18, Feb. 28, 1958; Assoc.,
Inc. and Surety Co., Inc. v. Iya, et al., L-10837-38, May 30,
1958). Therefore, the general rule is that mortgage on a
building is a real estate mortgage, and not a mortgage on
a chattel (personal property) or a chattel mortgage. Indeed,
the nature of the building as real property does not depend
on the way the parties deal with it. (Leung Yee v. Strong
Machinery Co., 37 Phil. 644; Ladera v. Hodges, [CA] 48 O.G.
5374). A dismantled house and/or materials of such house
should be regarded as personal properties. (See Biscerra,
et al. v. Teneza, et al., L-16218, Nov. 29, 1962).
Leung Yee v. Strong Machinery Co.
37 Phil. 644
FACTS: The “Compania Agricola Filipina” purchased
from “Strong Machinery Co.” rice-cleaning machines which
13
Art. 415
CIVIL CODE OF THE PHILIPPINES
the former installed in one of its buildings. As security
for the purchase price, the buyer executed a CHATTEL
MORTGAGE on the machines and the building on which
they had been installed. Upon buyer’s failure to pay, the
registered mortgage was foreclosed, and the building was
purchased by the seller, the “Strong Machinery Co.” This
sale was annotated in the Chattel Mortgage Registry.
Later, the “Agricola” also sold to “Strong Machinery” the
lot on which the building had been constructed. This sale
was not registered in the Registry of Property BUT the
Machinery Co. took possession of the building and the lot.
Previously however, the same building had been purchased
at a sheriff’s sale by Leung Yee, a creditor of “Agricola,”
although Leung Yee knew all the time of the prior sale in
favor of “Strong Machinery.” This sale in favor of Leung
Yee was recorded in the Registry. Leung Yee now sues to
recover the property from “Strong Machinery.” Issue: who
has a better right to the property?
HELD: The building is real property, therefore, its
sale as annotated in the Chattel Mortgage Registry cannot be given the legal effect of registration in the Registry
of Real Property. The mere fact that the parties decided
to deal with the building as personal property does not
change its character as real property. Thus, neither the
original registry in the chattel mortgage registry, nor the
annotation in said registry of the sale of the mortgaged
property had any effect on the building. However, since
the land and the building had first been purchased by
“Strong Machinery” (ahead of Leung Yee), and this fact
was known to Leung Yee, it follows that Leung Yee was
not a purchaser in good faith, and should therefore not
be entitled to the property. “Strong Machinery” thus has
a better right to the property.
Prudential Bank v. Panis
GR 50008, Aug. 31, 1988
In the enumeration of properties under Article 415,
the inclusion of “building” separate and distinct from the
land, in said provision of law, can only mean that a building is by itself an immovable property.
14
CIVIL CODE OF THE PHILIPPINES
Art. 415
While a mortgage of land necessarily includes, in
the absence of stipulation of the improvements thereon,
buildings, still a building by itself may be mortgaged
apart from the land on which it has been built. Such a
mortgage would still be a real estate mortgage for the
building would still be considered immovable property
even if dealt with separately and apart from the land.
Possessory rights, thus, over buildings before title
is vested on the grantee may be validly transferred or
conveyed as in a deed of mortgage.
(c)
May a house built on rented land be the object of a mortgage?
ANS.: Yes, in a real mortgage (real estate mortgage).
It may even be the subject of a chattel mortgage provided
two conditions are present; namely, that the parties to the
contract so agree, and that no innocent third party will be
prejudiced. Thus, if a chattel mortgage, duly registered, is
made on a building, and subsequently a real mortgage is
made on the land and the building, it is the real mortgage,
not the chattel mortgage which should be preferred. This
is particularly true with respect to third persons. Moreover, insofar as execution proceedings are considered, the
house would be considered real property. (See Evangelista
v. Abad, 36 O.G. 2913 [CA]; Tomines v. San Juan, [CA] 45
O.G. 2935; Navarro v. Pineda, L-18456, Nov. 30, 1963). This
is really because one who has so agreed is estopped from
denying the existence of the chattel mortgage. However,
even if so stipulated as personal property, still for purposes
of sale at a public auction (particularly regarding notice by
publication) under Rule 39, Sec. 15 of the Rules of Court
on execution sales, the house should be considered real
property. (Manalang, et al. v. Ofilada, L-8133, May 18,
1956). Moreover, a building subjected to a chattel mortgage,
cannot be sold extra-judicially under the provisions of Act
3135 since said Act refers only to real estate mortgages.
(Luna v. Encarnacion, et al., 91 Phil. 531).
(d)
Building Mortgaged Separately from the Land on Which
It Has Been Built
15
Art. 415
CIVIL CODE OF THE PHILIPPINES
While it is true that a mortgage of land necessarily
includes, in the absence of stipulation, the improvements
thereon, including buildings, still a building by itself may
be mortgaged apart from the land on which it has been
built. Such a mortgage would still be a real estate mortgage for the building would still be considered immovable
property even if dealt with separately and apart from the
land. (Leung Yee v. Strong Machinery Co., 37 Phil. 644).
In case such a building is made the subject of a chattel
mortgage, and the mortgage is registered in the chattel
mortgage registry, the mortgage would still be void insofar as third persons are concerned. (Leung Yee v. Strong
Machinery Co., 37 Phil. 644; Evangelista v. Alto Surety
and Ins., Co., Inc., L-11139, Apr. 23, 1958).
[NOTE: There is no legal compulsion to register (to
serve as notice to third persons), transactions over buildings that do not belong to the owners of the lands on which
they stand. There is NO registry in this jurisdiction of
buildings apart from the land. (Manalansan v. Manalang,
et al., L-13646, July 26, 1960).].
(e)
Sale or Mortgage of a Building which Would Be the Object
of Immediate Demolition
A building that is sold or mortgaged and which would
immediately be demolished may be considered personal
property and the sale or mortgage thereof would be a sale
of chattel, or a chattel mortgage respectively, for the true
object of the contract would be the materials thereof. (3
Manresa, 6th Ed., p. 19, See also Bicerra, et al. v. Teneza,
et al., L-16218, Nov. 29, 1962).
Bicerra, et al. v. Teneza, et al.
L-16218, Nov. 29, 1962
FACTS: A complaint was filed in the Court of First
Instance (now Regional Trial Court) alleging that the
defendants had forcibly demolished the house of the
plaintiffs worth P200. The plaintiffs asked for damages
or for a declaration that the materials belong to them.
Issue: Does the CFI (now RTC) have jurisdiction?
16
CIVIL CODE OF THE PHILIPPINES
Art. 415
HELD: No, because no real property is being sued
upon, the house having ceased to exist, and the amount of
damages sought does not exceed the jurisdictional amount
in inferior courts. While it is true that the complaint also
seeks that the plaintiffs be declared the owners of the
dismantled house or the materials, such does not in any
way constitute the relief itself, but is only incidental to
the real cause of action — which concerns the recovery of
damages.
(f)
Ministerial Duty of the Registrar of Property
When parties present to the registrar of property a
document of chattel mortgage, the registrar must record it
as such even if in his opinion, the object of the contract is
real property. This is because his duties in respect to the
registration of chattel mortgages are of a purely ministerial character, as long as the proper fee has been paid.
Thus in one case, the tenant executed a deed of chattel
mortgage on the building she had built on the land she
was renting. The court held that the registrar has the
ministerial duty to record the chattel mortgage since he is
not empowered to determine the nature of any document
of which registration is sought as a chattel mortgage.
(Standard Oil Co. v. Jaranillo, 44 Phil. 631).
Standard Oil Co. v. Jaranillo
44 Phil. 631
FACTS: De la Rosa, who was renting a parcel of
land in Manila, constructed a building of strong materials
thereon, which she conveyed to plaintiff by way of chattel
mortgage. When the mortgagee was presenting the deed
to the Register of Deeds of Manila for registration in the
Chattel Mortgage Registry, the Registrar refused to allow
the registration on the ground that the building was a
real property, not personal property, and therefore could
not be the subject of a valid chattel mortgage. Issue: May
the deed be registered in the chattel mortgage registry?
HELD: Yes, because the Registrar’s duty is MINISTERIAL in character. There is no legal provision con17
Art. 415
CIVIL CODE OF THE PHILIPPINES
ferring upon him any judicial or quasi-judicial power to
determine the nature of the document presented before
him. He should therefore accept the legal fees being tendered, and place the document on record.
Toledo-Banaga v. CA
102 SCAD 906, 302 SCRA 331 (1999)
It is a ministerial function of the Register of Deeds
to comply with the decision of the court to issue a title
and register a property in the name of a certain person,
especially when the decision had attained finality.
(g)
Constructions of All Kinds
Though the law says “constructions of all kinds adhered to the soil,” it is understood that the attachment
must be more or less permanent. (3 Manresa 18). A wall
or a fence would be a good example of this kind of real
property by incorporation. This is true even if the fence
or wall is built only of stones as long as there is an intent
to permanently annex the same. Even railroad tracks or
rails would come under this category, for although they
are not exactly roads, they are certainly “constructions.”
Note, however, that wooden scaffoldings on which painters stand while painting the walls of a house are merely
personal property in view of the lack of “adherence” to the
soil.
(4) Paragraph 2: ‘Trees, plants and growing crops, while
they are attached to the land or form an integral part
of an immovable.’
(a)
Trees and Plants
No matter what their size may be, trees and plants
are considered real property, by nature if they are the
spontaneous products of the soil, and by incorporation, if
they were planted thru labor. But the moment they are
detached or uprooted from the land, they become personal
property, except in the case of uprooted timber, if the land is
timber land. This is because, although no longer attached,
the timber still forms an “integral part” of the timber land
18
CIVIL CODE OF THE PHILIPPINES
Art. 415
— immovable. (See 3 Manresa 22). Indeed, trees blown by
a typhoon still remain part of the land upon which they
rest, and should be considered real property. (See Walsh,
The Law on Property, pp. 9-10).
(b)
Registration of Land Containing Trees and Plants
A filed registration proceedings for a parcel of land.
The land contained trees and plants still annexed to the
soil. If A succeeds in having the land registered under his
name, will he also be considered the owner of the trees
and plants?
HELD: Yes, trees and plants annexed to the land are
parts thereof, and unless rights or interests in such trees
or plants are claimed in the registration proceedings by
others, they become the property of the person to whom
the land is adjudicated. (Lavarro v. Labitoria, 54 Phil.
788).
(c)
Growing Crops on One’s Own Land
Growing crops, by express codal provisions, are considered real property by incorporation. Moreover, under
the Rules of Court, growing crops are attached in the same
way as real property. (Rule 57, Sec. 7). However, under
the chattel mortgage law, growing crops may be considered as personal property, and may thus be the subject
of a chattel mortgage. (See Sibal v. Valdez, 50 Phil. 512).
Moreover, a sale of growing crops should be considered a
sale of personal property. (3 Manresa 22). This is because
when the crops are sold, it is understood that they are to
be gathered. A harvest may indeed be classed as a sale of
future or hereafter-acquired property. However, in a Court
of Appeals case, it was held that coconut trees remain real
property even if sold separate and apart from the land on
which they grow — as long as the trees are still attached
to the land or form an integral part thereof. (Geguillana
v. Buenaventura, et al., [CA] GR 3861-R, Jan. 31, 1951).
(d)
Growing Crops on Another’s Land
Inasmuch as the law makes no distinction, growing
crops whether on one’s land or on another’s, as in the
19
Art. 415
CIVIL CODE OF THE PHILIPPINES
case of a usufructuary, a possessor or a tenant, should be
considered real property. (3 Manresa 22). The important
thing is for them to be still attached to the land. On the
other hand, once they have been severed, they become
personal property, even if left still scattered or lying about
the land.
(e)
Synonyms
“Growing crops’’ are sometimes referred to as “standing crops’’ or “ungathered fruits’’ or “growing fruits.’’
(5) Paragraph 3: ‘Everything attached to an immovable in a
fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object.’
[NOTE: Under this paragraph, for the incorporated
thing to be considered real property, the injury or breakage
or deterioration in case of separation, must be SUBSTANTIAL.].
[NOTE: In Roman Law, things included in paragraph 3
were called res vinta.].
(a)
Examples: A fixed fire escape stairway firmly embedded in
the walls of a house, an aqueduct, or a sewer, or a well.
(b)
Par. 3 Distinguished from Par. 4:
Par. 3
Par. 4
(1)
cannot be separated from
immovable without breaking or deterioration
(1) can be separated from immovable without breaking
or deterioration
(2)
need not be placed by the
owner. (Ladera v. Hodges,
CA, 48 O.G. 5374).
(2) must be placed by the
owner, or by his agent,
express or implied
(3)
real property by incorporation
(3) real property by incorporation and destination
20
CIVIL CODE OF THE PHILIPPINES
(c)
Art. 415
Query: Suppose the properties referred to in paragraph
3 are temporarily removed, but there is an intention to
replace them, should they be considered real or personal
property?
ANS.: It is believed that they should be regarded as
personal property inasmuch as the “incorporation” has
ceased. The Partidas contained an express provision making said property real, but in view of the elimination in
the Code of said provision, we may say that same should
no longer apply, despite a contrary opinion expressed by
a member of the Code Commission. (Capis-trano, 1 Civil
Code, p. 338).
(6) Paragraph 4: ‘Statues, reliefs, paintings or other objects
for use or ornamentation, placed in buildings or on land
by the owner of the immovable in such a manner that
it reveals the intention to attach them permanently to
the tenements.’
(a)
Examples: A fixed statue in the garden of a house, a permanent painting on the ceiling, a picture embedded in
the concrete walls of a house, a rug or carpet fastened to
the floor, as in the case of wall to wall carpeting.
[NOTE: A PC or a picture hanging on the wall should
be considered chattel.].
(b)
Placing by the Owner
The objects must be placed by the owner of the immovable (buildings or lands) and not necessarily by the
owner of the object. Of course, the owner of the building
or land may act thru his agent, or if he be insane, thru
his duly appointed guardian. (See Valdez v. Altagracia,
225 U.S. 58). If placed by a mere tenant, the objects must
remain chattels or personalty for the purposes of the Chattel Mortgage Law. (Davao Sawmill v. Castillo, 61 Phil.
709).
(c)
BAR
If during the construction of my house, I request
my neighbor to keep in the meantime a painting (with
21
Art. 415
CIVIL CODE OF THE PHILIPPINES
frame) which I own and my friend attaches said painting
on his own wall, should the painting be regarded as real
or personal property?
ANS.: Personal, in view of the lack of intent to attach permanently in my neighbor’s house. Note the word
“permanently” in paragraph No. 4.
(7) Paragraph 5: ‘Machinery, receptacles, instruments, or
implements intended by the owner of the tenement
for an industry or works which may be carried on in a
building or on a piece of land, and which tend directly
to meet the needs of the said industry or works.’
(a)
Essential Requisites
1)
The placing must be made by the owner of the tenement, his agent, or duly authorized legal representative.
2)
The industry or works must be carried on in the
building or on the land. A transportation business
is not carried on in a building or in the compound.
(Mindanao Bus Co. v. City Assessor, L-17870, Sep.
29, 1962).
3)
The machines, etc., must tend directly to meet the
needs of said industry or works. (ADAPTABILITY).
4)
The machines must be essential and principal elements in the industry, and not merely incidental.
[Thus, cash registers, typewriters, calculators,
computers, fax machines, etc., usually found and
used in hotels, restaurants, theaters, etc. are merely
incidentals, and not and should not be considered
immobilized by destination, for these businesses
can continue or carry on their functions without
these equipments. The same applies to the repair
or service shop of the transportation business because the vehicles may be repaired or serviced in
another shop belonging to another. On the other
hand, machineries of breweries used in the manufacture of liquor and soft drinks, though movable by
22
CIVIL CODE OF THE PHILIPPINES
Art. 415
nature, are immobilized because they are essential
to said industries; but the delivery trucks and adding machines which they usually own and use and
are found within their industrial compounds are
merely incidentals and retain their movable nature.
(Mindanao Bus Co. v. City Assessor and Treasurer,
L-17870, Sep. 29, 1962).
(b)
Paragraph 5 refers to real property by destination or purpose
(c)
Effect of Separation
If the machine is still in the building, but is no
longer used in the industry conducted therein, the machine reverts to the condition of a chattel. Upon the other
hand, if still needed for the industry, but separated from
the tenement temporarily, the property continues to be
immovable, inasmuch as paragraph 5 refers, not to real
property by incorporation, but to real property by destination or purpose.
(d)
(e)
Examples of the machinery, receptacles, instruments, implements.
1)
Machines placed in a sugar central (and therefore,
if the central has already been the subject of a real
estate mortgage, the machines become subject also
to such mortgage). (Berkenkotter v. Cu Unjieng, 61
Phil. 663).
2)
Machines attached to concrete foundations of buildings in a fixed manner such that they cannot be
separated therefrom without unbolting the same and
cutting some of their wooden supports. (Machinery
v. Pecson, L-7057, Oct. 29, 1954).
Cases
Davao Sawmill Co. v. Castillo
61 Phil. 709
FACTS: A tenant placed machines for use in a sawmill on the land of the landlord. Is the machinery real or
personal?
23
Art. 415
CIVIL CODE OF THE PHILIPPINES
HELD: As a rule, the machinery should be considered as personal, since it was not placed on the land by
the owner of said land. Immobilization by destination or
purpose cannot generally be made by a person whose possession of the property is only TEMPORARY, otherwise
we will be forced to presume that he intended to give the
property permanently away in favor of the owner of the
premises.
Valdez v. Central Altagracia, Inc.
225 U.S. 58
FACTS: Suppose in the first case, the tenant had
promised to give the machinery later to the owner of the
land; or suppose the tenant acted only as the agent of the
owner of the land, would the machinery be considered real
or personal?
HELD: The machinery would be considered as real
property in both instances. “Machinery placed on property
by a tenant does not become immobilized: when however,
a tenant places it there pursuant to a contract that it shall
belong to the owner, it becomes immobilized as to that
tenant and his assigns having notice, although it does not
become so as to the creditors not having legal notice of the
lease.’’ “Machinery which is movable in its nature becomes
immobilized when placed in a plant by the owner of the
property or plant, but not when so placed by a tenant, a
usufructuary, or a person having only a temporary right,
unless such person acted as the agent of the owner.’’ (Davao
Sawmill Co., Inc. v. Castillo, supra).
B.H. Berkenkotter v. Cu Unjieng
61 Phil. 663
FACTS: The Mabalacat Sugar Company borrowed
from the defendant a sum of money, mortgaging as security two lots together with all its buildings and improvements. Later, to increase its productive capacity, the
Company purchased additional machines and a new sugar
mill which were needed for the sugar industry. Issue: Are
the additional machines also considered mortgaged?
24
CIVIL CODE OF THE PHILIPPINES
Art. 415
HELD: The mortgage of a parcel of land generally
includes all future improvements that may be found on
said parcel. These improvements include real properties,
like the additional machines and sugar mill purchased.
Said additional machinery are real properties because
they are essential and principal elements of the sugar
central. Without them, the sugar central would be unable
to carry out its industrial purpose.
(f)
BAR QUESTION
1)
When is machinery attached to land or a tenement
considered immovable? [ANS.: Par. 5, Art. 415].
2)
Give the exception. [ANS.: When placed on the land
or tenement by a tenant.] (Davao Sawmill v. Castillo, supra).
3)
Give the exception to the exception. [ANS.: when the
tenant had promised to leave the machinery on the
tenement at the end of the lease, or when he acted
only as agent of the owner of the land.]. (Valdez v.
Central, supra).
Ago v. Court of Appeals, et al.
L-17898, Oct. 31, 1962
Sawmill machineries and equipment installed in a
sawmill for use in the sawing of logs, a process carried
on in said building, become real properties, and if they
are judicially sold on execution without the necessary
advertisement of sale by publication in a newspaper as
required in Section 16 of Rule 39 of the Rules of Court,
the sale made by the sheriff would be null and void.
People’s Bank and Trust Co.
v. Dahican Lumber Co.
L-17500, May 16, 1967
FACTS: Several parcels of land were the objects of a
real estate mortgage. The mortgage deed also stated that
25
Art. 415
CIVIL CODE OF THE PHILIPPINES
the mortgage included essential after-acquired properties
such as machinery, fixtures, tools, and equipment. The
real mortgage was then registered as such in the Registry
of Deeds. Issue: Should the deed also be registered in the
chattel mortgage registry insofar as it covered the afteracquired machinery, fixtures, tools and equipment?
HELD: No more, since the after-acquired properties
had been immobilized by destination (they were used in
the development of the lumber concession).
[NOTE: Please observe that in this case, the parties
to the real mortgage had treated the after-acquired properties as real properties by agreeing that they would be automatically subject to the lien of the real estate mortgage
executed by them. In the Davao Sawmill Co. v. Castillo
(61 Phil. 709) case, the parties had treated after-acquired
properties, including the machines, as personal property
by executing chattel mortgages thereon. Hence, this Davao
Sawmill case cannot apply to the instant case.].
Board of Assessment Appeals, Q.C. v. Meralco
10 SCRA 68
ISSUE: Are the steel towers or poles of the MERALCO considered real or personal properties?
HELD: They are personal (not real) properties. Be
it noted that:
(a)
they do not come under Par. 1 of Art. 415 because
they are neither buildings or constructions adhered
to the soil;
(b)
they do not come under Par. 3 because they are not
attached to an immovable in a fixed manner, that is,
they can be separated without breaking the material
or causing deterioration of the object to which they
are attached;
(c)
they do not come under Par. 5 because they are not
machineries, receptacles, or instruments, but even
26
CIVIL CODE OF THE PHILIPPINES
Art. 415
if they are, they are not intended for an industry to
be carried on in the premises.
(8) Paragraph 6: ‘Animal houses, pigeon-houses, beehives,
fishponds or breeding places of similar nature, in case
their owner has placed them or preserves them with
the intention to have them permanently attached to the
land, and forming a permanent part of it; the animals
in these places are included.’
(a)
Non-necessity for this Paragraph insofar as “Houses’’ are
Concerned
The “houses” referred to here may already be deemed
included in paragraph 1 when speaking of “constructions
of all kinds adhered to the soil.” (See 3 Manresa 31).
(b)
The Animals Inside
Inasmuch as there used to be doubts before as to
whether or not the animals in the “houses” are included
as real property, the Code Commission decided to eliminate confusion on the matter. (See 1 Capistrano, pp. 338339).
(c)
Suppose the Animals are Temporarily Outside
It is submitted that even if the animals are temporarily outside, they may still be considered as “real property,’’
as long as the intent to return is present, as in the case of
a homing pigeon. But from the point of view of criminal
law, they must be considered as personal property, and
may properly be the object of theft or robbery.
(d)
Alienation of the Animals
When the animals inside the permanent animal
houses are alienated onerously or gratuitously, it is believed that the transaction is an alienation of personal
property, unless the building or the tenement is itself
also alienated. This is because in said alienation, the
animal structures must of necessity be detached from the
immovable. Hence, an ordinary inter vivos donation of a
pigeon-house need not be in a public instrument.
27
Art. 415
(e)
CIVIL CODE OF THE PHILIPPINES
Temporary Structures of Cages
A temporary bird cage easily removable, or which
may be carried from place to place, is a chattel. The birds
inside are also chattel.
(9) Paragraph 7: ‘Fertilizer actually used on a piece of
land.’
Fertilizers still in the barn and even those already on
the ground but wrapped inside some newspapers or any other
covering are still to be considered personal property, for they
have not yet been “actually” used or spread over the land.
(10) Paragraph 8: ‘Mines, quarries, and slag dumps while the
matter thereof forms part of the bed, and waters, either
running or stagnant.’
(a)
Mines, including the minerals still attached thereto,
are real properties, but when the minerals have been
extracted, the latter become chattels. (See 40 C.J., pp.
903-904).
(b)
“Slag dump’’ is the dirt and soil taken from a mine and
piled upon the surface of the ground. Inside the “dump’’
can be found the minerals. (Nordstrom v. Sivertson-Johnson Min., etc. Co., 5 Alaska 204).
(c)
The “waters” referred to are those still attached to or
running thru the soil or ground. But “water” itself as
distinguished from “waters,” is clearly personal property.
Upon the other hand, canals, rivers, lakes, and such part
of the sea as may be the object of appropriation, are classified as real property.
(11) Paragraph 9: ‘Docks and structures which, though floating, are intended by their nature and object to remain
at a fixed place on a river, or coast.’
(a)
Floating House
A floating house tied to a shore or bank post and
used as a residence is considered real property, consider28
CIVIL CODE OF THE PHILIPPINES
Art. 415
ing that the “waters” on which it floats, are considered
immovables. In a way, we may say that the classification
of the accessory (the floating house) follows the classification of the principal (the waters). However, if the floating
house makes it a point to journey from place to place, it
assumes the category of a vessel.
(b)
Vessels
1)
Vessels are considered personal property. As a matter
of fact, they are indeed very movable. (See Philippine
Refining Co., Inc. v. Jarque, 61 Phil. 229).
2)
Because they are personal property, they may be
the subject of a chattel mortgage. (McMicking v.
Banco Español-Filipino, 13 Phil. 429; Arroyo v. Yu
de Sane, 54 Phil. 7). However, a chattel mortgage on
a vessel should be registered not in the Registry of
Deeds or Property, but in the record of the Collector
of Customs at the Port of Entry. (Rubiso and Gelito
v. Rivera, 37 Phil. 72; Arroyo v. Yu de Sane, 54 Phil.
7). In all other respects, however, a chattel mortgage
on a vessel is generally like other chattel mortgages
as to its requisites and validity. (Phil. Refining Co.,
Inc. v. Jarque, 61 Phil. 229).
NOTE: A chattel mortgage on a car in order to
affect third persons should not only be registered in
the Chattel Mortgage Registry but also in the Motor
Vehicles Office. (Aleman, et al. v. De Catera, et al.,
L-13693-94, Mar. 25, 1961).
3)
Although vessels are personal property, they partake
to a certain extent of the nature and conditions of
real property because of their value and importance
in the world of commerce. Hence, the rule in the
Civil Code with reference to acquisition of rights
over immovable property (particularly the rules
on double sale) can be applied to vessels. (This is
specially so since the rules in the Civil Code, Art.
1544, on a double sale of realty are repeated in the
Code of Commerce.) Hence, priority of registration
by a purchaser in good faith will give him a better
29
Art. 415
CIVIL CODE OF THE PHILIPPINES
right than one who registers his right subsequently.
(Rubiso v. Rivera, 37 Phil. 72). This is true whether
the ships or vessels be moved by steam or by sail.
(Rubiso v. Rivera, supra).
(c)
BAR
Is the steamship President Cleveland personal or
real property?
ANS.: It can be moved from place to place, hence, it
is personal property, although it PARTAKES THE NATURE of real property in view of its importance in the
world of commerce.
(12) Paragraph 10: ‘Contracts for public works, and servitudes and other real rights over immovable property.’
(a)
Compared with the Old Law
Under the old Civil Code, the words “administrative concessions for public works” were used instead of
“contracts for public works.”
(b)
Rights
The properties referred to in paragraph 10 are not
material things but rights, which are necessarily intangible. (See 3 Manresa 11). The piece of paper on which the
contract for public works has been written is necessarily
personal property, but the contract itself, or rather, the
right to the contract, is real property. A servitude or easement is an encumbrance imposed on an immovable for
the benefit of another immovable belonging to another
owner, or for the benefit of a person, group of persons, or
a community (like the easement of right of way). (Arts.
613-614). Other real rights over real property include real
mortgage (see Hongkong and Shanghai Bank v. Aldecoa
and Co., 30 Phil. 255), antichresis, possessory retention,
usufruct and leases of real property, when the leases have
been registered in the Registry of Property; or even if not
registered, if their duration is for more than a year.
30
CIVIL CODE OF THE PHILIPPINES
Art. 415
Upon the other hand, the usufruct of personal property or a lease of personal property, should be considered
personal property.
Presbitero v. Fernandez
L-19527, Mar. 30, 1963
ISSUE: Are “sugar quotas” real or personal property?
HELD: They are real property, for they are by law
considered “real rights over immovable property” just like
servitudes and easements. (See Art. 415, No. 10). EO 873
regards them as “improvements” attached, though not
physically, to the land.
(c)
Real Property by Analogy
It should be noted that the properties or rights
referred to in paragraph 10 are considered real property
by analogy, inasmuch as, although they are not material,
they nevertheless partake of the essential characteristics
of immovable property.
(d)
Old Real Rights Eliminated
The real right of use and habitation, Arts. 523-529
of the old Civil Code, and the real right of censo (ground
rents), Arts. 1604-1664 of the old Civil Code, have been
eliminated in the new Civil Code, because according to
the Code Commission, they have never been referred to
in Philippine contracts or wills.
31
CIVIL CODE OF THE PHILIPPINES
Chapter 2
MOVABLE PROPERTY
Art. 416. The following things are deemed to be personal
property:
(1) Those movables susceptible of appropriation which
are not included in the preceding article;
(2) Real property which by any special provision of law
is considered as personalty;
(3) Forces of nature which are brought under control
by science; and
(4) In general, all things which can be transported from
place to place without impairment of the real property to
which they are fixed.
COMMENT:
(1) Examples of the Various Kinds of Personal Property
For Paragraph 1 — a fountain pen; a piano; animals.
For Paragraph 2 — growing crops for the purposes of the
Chattel Mortgage Law (Sibal v. Valdez, 50 Phil. 512); machinery placed on a tenement by a tenant who did not act as the
agent of the tenement owner. (Davao Sawmill v. Castillo, 61
Phil. 709).
For Paragraph 3 — electricity, gas, light, nitrogen. (See
U.S. v. Carlos, 21 Phil. 543).
For Paragraph 4 — machinery not attached to land nor
needed for the carrying on of an industry conducted therein;
portable radio; a laptop computer; a diploma hanging on the
wall.
32
CIVIL CODE OF THE PHILIPPINES
Art. 416
(2) Cases
Sibal v. Valdez
50 Phil. 512
FACTS: In a case brought by plaintiff against defendant,
the latter won. For the purpose of satisfying the judgment won
by the defendant, the sheriff attached the sugar cane that was
then growing on the lots of the plaintiff. Said lots incidentally
had already been previously attached by another judgment
creditor of the plaintiff. Within the one-year period given by
law for redemption, the plaintiff wanted to redeem the lots
from one creditor, and the sugar cane from the other creditor.
The lots were redeemed, the redemption of the sugar cane was
however refused by the defendant, who contended that the
sugar cane was personal property, and therefore could not be
the subject of the legal redemption sought to be enforced. The
plaintiff upon the other hand claimed that the sugar cane was
real property for same could be considered as “growing fruits”
under par. 2 of Art. 415. Issue: How should the sugar cane be
regarded — as real property or as personal property?
HELD: The sugar cane, although considered as “growing
fruits” and therefore ordinarily real property under Par. 2 of
Art. 415 of the Civil Code, must be regarded as PERSONAL
PROPERTY for purposes of the Chattel Mortgage Law, and
also for purposes of attachment, because as ruled by the Louisiana Supreme Court, the right to the growing crops mobilizes
(makes personal, as contradistinguished from immobilization)
the crops by ANTICIPATION. More specifically, it said that
the existence of a right on the growing crop is a mobilization
by anticipation, a gathering as it were, in advance, rendering
the crop movable. (See Lumber Co. v. Sheriff, 106 La. 418).
U.S. v. Carlos
21 Phil. 543
FACTS: The defendant used a “jumper” and was thus able
to divert the flow of electricity, causing loss to the Meralco of
over 2000 kilowatts of current. Accused of theft, his defense
was that electricity was an unknown force, not a fluid, and
being intangible, could not be the object of theft.
33
Art. 416
CIVIL CODE OF THE PHILIPPINES
HELD: While electric current is not a fluid, still its manifestations and effects like those of gas may be seen and felt. The
true test of what may be stolen is not whether it is corporeal
or incorporeal, but whether, being possessed of value, a person
other than the owner, may appropriate the same. Electricity,
like gas, is a valuable merchandise, and may thus be stolen.
(See also U.S. v. Tambunting, 41 Phil. 364).
Involuntary Insolvency of Stochecker v. Ramirez
44 Phil. 933
A half-interest in a drugstore business, being capable of
appropriation, but not included in the enumeration of real properties under Art. 415, should be considered personal property,
and may thus be the subject of a chattel mortgage.
(3) Three Tests to Determine whether Property Is Movable
or Immovable
Manresa mentions three tests:
(a)
If the property is capable of being carried from place
to place (test by description);
(b)
If such change in location can be made without
injuring the real property to which it may in the
meantime be attached (test by description); and
(c)
If finally, the object is not one of those enumerated
or included in Art. 415 (test by exclusion).
Then the inevitable conclusion is that the property is personal property. (3 Manresa 46-47).
[NOTE: Test by exclusion is superior to the test
by description.].
(4) Other Incorporeal Movables
A patent, a copyright, the right to an invention — these
are intellectual properties which should be considered as personal property.
(5) Personal Effects
“Personal effects’’ are personal property, but not all personal property are “personal effects.’’ “Personal effects’’ include
34
CIVIL CODE OF THE PHILIPPINES
Art. 417
only such tangible property as applied to a person and cannot
include automobiles, although they indeed are personal property. (Hemnani v. Export Control Committee, L-8414, Feb. 28,
1957).
(6) ‘Order of Demolition’
City of Baguio v. Niño
487 SCRA 211 (2006)
FACTS: The requirement of Sec. 10(d) of Rule 39 of the
Rules of Court that the executing officer shall not destroy, demolish, or remove improvements except upon special order of
the court, issued upon motion and after due hearing, echoes the
constitutional provision that “no person shall be deprived of life,
liberty, or property without due process of law, nor shall any
person be denied of equal protection of the laws.” Issue: What
is the extent to which an administrative entity may exercise
process depend largely on?
HELD: Such depend largely, if not wholly, on the provisions of the statute creating or empowering such agency. There
is, however, no explicit provision granting the Bureau of Lands
(now the Land Management Bureau) or the Department of
Environment and Natural Resources (DENR) –– which exercises control over the Land Management Bureau (LMB) –– the
authority to issue an order of demolition.
Art. 417. The following are also considered as personal
property:
(1) Obligations and actions which have for their object
movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and
industrial entities, although they may have real estate.
COMMENT:
Other Kinds of Personal Property
35
Art. 417
CIVIL CODE OF THE PHILIPPINES
(1) Paragraph 1: “Obligations and actions which have for
their object movables or demandable sums.’’
(a)
Examples: If somebody steals my car, my right to bring
an action to recover the automobile is personal property
by itself. If my debtor owes me P1 million, my credit as
well as my right to collect by judicial action is also personal property. This is because, although the law uses the
term “obligations,” same really refers to rights or credits.
If my credit has not yet matured, my right to collect it
eventually is considered personal property, even if in
the meantime, the money is not yet due. Of course, till
the debt matures, I have no right yet to actually collect;
but a right to collect in the future exists already (now);
and this is why I am allowed to bring in the meantime,
actions to preserve my right. If the object is illegal, it is
not considered demandable and therefore no right exists. Note, however, that a right to recover possession
for instance of a piece of land is considered real, and not
personal property. This is because the object of my right
is an immovable.
(b)
A promissory note is personal property; the right to collect it is also personal property; but a mortgage on real
estate is real property by analogy. (Par. 10, Art. 415; see
also Hilado v. Register of Deeds, 49 Phil. 542; Hongkong
and Shanghai Bank v. Aldecoa and Co., 30 Phil. 255).
(2) Paragraph 2: “Shares of stock of agricultural, commercial, and industrial entities, although they may have real
estate.”
(a)
Examples:
A share of stock in a gold mining corporation is personal property; but the gold mine itself, as well as any
land of the corporation, is regarded as real property by
the law. The certificate itself evidencing ownership of the
share, as well as the share itself, is regarded as personal
property. Being personal, it may be the object of a chattel
mortgage. (See Chua Guan v. Samahang Magsasaka, Inc.,
36
CIVIL CODE OF THE PHILIPPINES
Art. 417
62 Phil. 472; see also Bachrach Motor Co. v. Ledesma, 64
Phil. 681).
[NOTE: Even if the sole property of a corporation
should consist only of real property, a share of stock in
said corporation is considered personal property. (Cedman
v. Winslow, 10 Mass. 145).].
(b)
Query: Is a share in a partnership considered personal
property? It is submitted that the answer is yes; as a
matter of fact, all shares in all juridical persons should
be considered personal property for there is no reason
to discriminate between shares in a corporation, and
shares in other juridical persons. This is true even if the
law apparently refers only to a corporation in view of the
use of the term “stock.’’ It is believed, however, that the
term “stock’’ should be understood not in its technical
sense of being categorized under securities (which include
options, warrants, derivatives, swaps, swaptions, bonds,
asset-backed securities, etc.) but in its generic meaning
of “participation.’’ As a matter of fact, the Supreme Court
has held that a half-interest in a drugstore business
is personal property, capable of being the subject of a
chattel mortgage. (Involuntary Insolvency of Stochecker
v. Ramirez, 44 Phil. 933). However, a half-interest in a
drugstore, considered as a building (and not a business)
is a real right in real property and is, therefore, by itself
real property.
(c)
Enforcement of Property Rights in Shares of Stock —
“Shares of stock are a peculiar kind of personal
property, and are unlike other classes of personal property
in that the property right of shares of stock can only be
exercised or enforced where the corporation is organized
and has its place of business, and can exist only as an
incident to and connected with the corporation, and this
class of property is inseparable from the domicile of the
corporation itself.’’ (Black Eagle Mining Co. v. Conroy, et
al., 221 Pac. 425, 426). If, however, the suit is directed not
against the corporation itself but involves the commission
of a crime — one element of which may be the ownership
37
Art. 418
CIVIL CODE OF THE PHILIPPINES
of shares of stock — the domicile of the corporation is
not an important factor, as long as any other element of
the crime is committed elsewhere, for instance, the place
where the criminal case is brought. (See Hernandez v.
Albano, et al., L-19272, Jan. 25, 1967).
(3) Is Money Merchandise?
When it is in domestic circulation, money is legal tender and is, therefore, NOT merchandise. When, however, it
is attempted to be exported or smuggled, it is deemed to be
taken out of domestic circulation and may be, therefore, now
considered as merchandise or commodity subject to forfeiture
pursuant to Central Bank Circular 37 in relation to Section
1363(f) of the Revised Administrative Code. (Com. of Customs
v. Capistrano, L-11075, June 30, 1960). It should be noted,
however, that whether money is legal tender or not, whether
it is merchandise or not, it still is PERSONAL property.
Art. 418. Movable property is either consumable or nonconsumable. To the first class belong those movables which
cannot be used in a manner appropriate to their nature
without their being consumed; to the second class belong all
the others.
COMMENT:
(1) Consumable and Non-Consumable Properties
Consumable — this cannot be used according to its nature
without its being consumed.
Non-consumable — any other kind of movable property.
(2) Classification and Examples
(a)
According to their nature: consumable and non-consumable.
(b)
According to the intention of the parties: fungible and
non-fungible (res fungibles and res nec fungibles).
38
CIVIL CODE OF THE PHILIPPINES
Art. 418
Explanation:
1)
If it is agreed that the identical thing be returned,
it is non-fungible, even though by nature it is consumable. Hence, if I borrow a sack of rice, not for
consumption but for display or exhibition merely (ad
ostentationem), the rice is considered non-fungible.
2)
If it is agreed that the equivalent be returned, the
property is fungible. Hence, if I borrow vinegar
(to consume) and promise to return an equivalent
amount of the same quality, the property is not only
consumable; it is also fungible. (See also Arnott v.
Kansas Pac. Ry. Co., 19 Kansas 95).
3)
In the law of credit transactions, a loan of rice for
consumption is considered a simple loan or mutuum;
while a loan of rice for exhibition is a commodatum.
[NOTE: The Civil Code, in many instances, uses
the words “consumable’’ and “fungible’’ interchangeably.].
[NOTE: It is evident, however, that fungibles
are those replaceable by an equal quality and quantity, either by the nature of things, or by common
agreement. If irreplaceable, because the identical
objects must be returned, they are referred to as
non-fungibles.].
39
CIVIL CODE OF THE PHILIPPINES
Chapter 3
PROPERTY IN RELATION TO THE PERSON
TO WHOM IT BELONGS
Art. 419. Property is either of public dominion or of
private ownership.
COMMENT:
Property Classified According to Ownership
This article expressly provides that properties are owned
either:
(a)
in a public capacity (dominio publico)
Heirs of Proceso Bautista
v. Sps. Barza
GR 79167, May 7, 1992
The function of administering and disposing of lands
of the public domain in the manner prescribed by law is
not entrusted to the courts but to executive officials.
(b)
or in a private capacity (propiedad privado)
Regarding the state, it may own properties both in
its public capacity (properties of public dominion) and in
its private capacity (patrimonial property).
Art. 420. The following things are property of public
dominion:
(1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
40
CIVIL CODE OF THE PHILIPPINES
Art. 420
(2) Those which belong to the State, without being for
public use, and are intended for some public service or for
the development of the national wealth.
COMMENT:
(1) ‘Public Dominion’ Defined
In a sense, public dominion means ownership by the
State in that the State has control and administration; in another sense, public dominion means ownership by the public
in general, in that not even the State or subdivisions thereof
may make them the object of commerce as long as they remain
properties for public use. Such is the case, for example, of a
river or a town plaza.
Republic of the Phils. v.
Lat Vda. De Castillo, et al.
GR 69002, June 30, 1988
Mere possession of land does not by itself automatically
divest the land of its public character.
Mendoza v. Navarette
214 SCRA 337
(1992)
A homestead patent, once registered under the Registration Act, becomes as indefeasible as a Torrens Title, is only
true and correct if the parcel of agricultural land patented or
granted by homestead by the Government, after the requirements of the law had been complied with, was a part of public
domain.
(2) Three Kinds of Property of Public Dominion
(a)
For public use — like roads, canals (may be used by ANYBODY).
(b)
For public service — like national government buildings,
army rifles, army vessels (may be used only by duly authorized persons).
41
Art. 420
(c)
CIVIL CODE OF THE PHILIPPINES
For the development of national wealth — like our natural
resources.
(3) Paragraph 1 states “and others of similar character.”
Examples are the following:
(a)
public streams. (Com. v. Meneses, 38 O.G. No. 123,
p. 2839).
(b)
natural beds of rivers. (Meneses v. Commonwealth, 69
Phil. 647).
(c)
river channels. (Meneses v. Commonwealth, supra).
(d)
waters of rivers. (Meneses v. Commonwealth, supra).
(e)
creeks — because “a creek is no other than an arm extending from a river.” (Mercado v. Mun. Pres. of Macabebe, 59
Phil. 592; Samson v. Dionisio, 11 Phil. 538).
Maneclang, et al. v. IAC
GR 66575, Sep. 30, 1986
A creek is a recess or arm extending from a river and
participating in the ebb and flow of the sea. It is a property belonging to the public domain. It is not susceptible
to private appropriation and acquisitive prescription. As
a public water, it cannot be registered under the Torrens
System in the name of any individual. Neither the mere
construction of irrigation dikes by the National Irrigation
Administration which prevents the water from flowing in
and out of a fishpond, nor its conversion into a fishpond,
alter or change the nature of the creek as a property
of the public domain. Hence, a compromise agreement
adjudicating the ownership of such property in favor of
an individual is null and void. It has no legal effect. It is
contrary to law and public policy.
(f)
all lands thrown up by the sea and formed by accretion
upon the shore by the action of the water, together with
the adjacent shore. (Art. 4 of the Spanish Law of Waters
of Aug. 3, 1866; Insular Gov’t. v. Aldecoa, 19 Phil. 505;
Ker and Co. v. Lauden, 6 Phil. 732).
42
CIVIL CODE OF THE PHILIPPINES
Art. 420
(g)
lands reclaimed from the sea by the Government. (Gov’t. v.
Cabangis, 53 Phil. 112). “Only the executive and possibly
the legislative department have the right and the power
to make the declaration that the lands so gained by action
of the sea is not necessary for purposes of public utility
or for the establishment of special industries or for coast
guard services.’’ (Monteverde, et al. v. Director of Lands,
L-4628, May 25, 1953; interpreting Art. 4 of the Spanish
Law of Waters of Aug. 3, 1866).
(h)
the Manila Bay area or coastal area inasmuch as it belongs to the state, and is used as a waterway. (Vda. de
Villongco v. Moreno, et al., L-17240, Jan. 31, 1962).
(i)
private lands which have been invaded by the waters or
waves of the sea and converted into portions of the shore
or beach. (Natividad v. Director of Lands, CA 37 O.G.,
p. 2905). [NOTE: Since the private owner here loses his
property in favor of the state without any compensation,
the occurrence has been referred to as a case of “natural
expropriation” (Ibid.) or a DE FACTO CASE of eminent
domain. (See Gov’t. of the Phil. Islands v. Cabangis, 53
Phil. 112).].
(j)
streets, even when planted by persons with coconut trees.
(Li Seng Giap v. Mun. Council of Daet, CA, O.G. Sup.,
Nov. 1, 1941, p. 217).
[NOTE: Some definitions:
1)
Shore — that space alternately covered and uncovered by the movement of the tide. (Art. 1, Sec. 3, The
Law of Waters).].
Republic of the Phils. v.
Lat Vda. De Castillo, et al.
GR 69002, June 30, 1988
Does a decision of the Land Registration Court
involving shore land constitute res judicata in an
action instituted by the Republic for the annulment
of title?
No. Shores are properties of the public domain
intended for public use (Art. 420, Civil Code), and
43
Art. 420
CIVIL CODE OF THE PHILIPPINES
therefore not registerable. Thus, it has long been
settled that portion of the foreshore or of the territorial waters and beaches cannot be registered. Their
inclusion in a certificate of title does not convert the
same into properties of private ownership or confer
title upon the registrant.
A lot which always formed part of a lake,
washed and inundated by the waters thereof are not
subject to registration, being outside the commerce
of men. If the lots in litigation are of public domain
(Art. 502, par. 4, Civil Code), the registration court
does not have jurisdiction to adjudicate the lands
as private property. Hence, res judicata does not
apply.
[NOTE: RA 1899 applies only to foreshore
lands, not to submerged lands. (Chavez v. Public
Lands Authority, 415 SCRA 403 {2003}).].
2)
Torrent — that amount of water which in case of
heavy rains gathers in deep places or canals where
it is supposed to flow afterwards. (See Ricci).
[NOTE: The amounts given by students to a government school, to answer in the future for the value of
materials and equipment destroyed by them, are PUBLIC
FUNDS. The relationship between the students and the
college is not one of depositors and depository but one of
creditors and debtors. This is so because the identical bills
given are not necessarily the same ones to be returned.
(People v. Montemayor, et al., L-17449, Aug. 30, 1962).].
Santos v. Moreno
L-15829, Dec. 4, 1967
FACTS: Ayala y Cia owned a big tract of land in
Macabebe, Pampanga, the Hacienda San Esteban. To provide access to different parts of the property, the Company
dug interlinking canals, which through erosion, gradually
acquired the characteristics of rivers. The company sold
part of the Hacienda to Santos, who closed some of the
canals and converted them into fishponds. The residents
44
CIVIL CODE OF THE PHILIPPINES
Art. 420
of the surrounding barrios (now barangays) complained
that the closure deprived them of their means of transportation, as well as of their fishing grounds. Issue: May
the canals be ordered open?
HELD: No, because said canals are of private ownership. Reason: “The said streams, considered as canals
of which they originally were are of private ownership.
Under Art. 420, canals constructed by the State and devoted to use are of public ownership. Conversely, canals
constructed by private persons within private lands and
devoted exclusively for private use must be of private
ownership.’’
(4) Are rivers whether navigable or not, properties of public
dominion?
ANS.: It would seem that Art. 420 makes no distinction.
However:
(a)
It should be noted that in Commonwealth v. Meneses, 38
O.G. No. 123, p. 2389, the Court mentioned only “navigable river” instead of “river” merely.
(b)
In the case of Commonwealth v. Palanca, 39 O.G. No. 8,
p. 161, the court seemed to imply that had the rivers been
“non-navigable” they would not have been properties of
public dominion.
(c)
In the case of Palanca v. Commonwealth, 40 O.G. (6th
S) No. 10, p. 148, the Supreme Court said: “The river
Viray and the estero Sapang Sedoria, being navigable,
useful for commerce, for navigation, and fishing, have the
character of public domain (or ownership).’’ Besides, in
that case, the government lawyers proved that the rivers
were navigable. (All this would seem to imply that nonnavigable rivers are not of public dominion, otherwise,
why did the government have to prove that the rivers
were navigable, and why did the Supreme Court use the
participial phrase “being navigable’’?) In a decision, the
Supreme Court has held that if a river is navigable, it is
of public dominion.
45
Art. 420
CIVIL CODE OF THE PHILIPPINES
(d)
In the case of People v. Jacobo, L-14151, Apr. 28, 1960, the
Supreme Court distinguished between public and private
streams; and held that a stream, generally, is only a creek,
and not a river as contemplated under Art. 420 of the
Civil Code. It concluded that it is only after the stream
has been declared a PUBLIC STREAM by the COURTS,
that a private person, claiming ownership thereof, may
be held liable for maintaining an obstruction thereon.
(e)
In the case of Lovina v. Moreno, L-17821, Nov. 29, 1963,
the Court ruled that the ownership of a navigable stream
or of its bed is not acquired by prescription.
(f)
In Taleon v. Secretary of Public Works, L-24281, May 16,
1967, it was held that if a river is capable in its natural
state of being used for commerce, it is navigable in fact,
and therefore becomes a public river.
Hilario v. City of Manila
L-19570, Apr. 27, 1967
FACTS: Sand and gravel were extracted by agencies
of the City of Manila from the San Mateo River banks of
the Hilario Estate in the province of Rizal. When Hilario
sued for indemnity, it was alleged that river banks are of
public ownership.
Issue: Are they really of public ownership?
HELD: River banks are of public ownership, hence
no indemnity need be given. Reason: The bed of a river is
of public dominion, hence also the banks since they are
part of the bed. While it is true that in Art. 638 on easements on river banks, the law speaks of both public and
private river banks, still these private river banks refer
to those already existing prior to the Law of Waters of
Aug. 3, 1866.
Martinez v. Court of Appeals
L-31271, Apr. 29, 1974, 56 SCRA 647
1)
Navigable rivers are outside the commerce of man
and therefore cannot be registered under the Land
46
CIVIL CODE OF THE PHILIPPINES
Art. 420
Registration Law. If converted into fishponds, the
latter can be demolished notwithstanding the Title,
for said Title cannot convert the streams into private
ones.
2)
Void land decisions like the present one can be attacked collaterally.
3)
The action of the State for reversion (of the rivers)
does not prescribe.
(5) Characteristics of Properties of Public Dominion
(a)
They are outside the commerce of man, and cannot be
leased, donated, sold, or be the object of any contract
(Mun. of Cavite v. Rojas, 30 Phil. 602), except insofar as
they may be the object of repairs or improvements and
other incidental things of similar character.
(b)
They cannot be acquired by prescription; no matter how
long the possession of the properties has been, “there can
be no prescription against the State regarding property of
the public domain.” (Palanca v. Commonwealth, 40 O.G.
6th S, No. 10, p. 148; Meneses v. Commonwealth, 69 Phil.
505). “Property of the State or any of its subdivisions
not patrimonial in character shall not be the object of
prescription.” (Art. 1113). Even a city or a municipality
cannot acquire them by prescription as against the State.
(See City of Manila v. Ins. Gov’t., 10 Phil. 327).
(c)
They cannot be registered under the Land Registration
Law and be the subject of a Torrens Title; if erroneously
included in a Torrens Title, the land involved remains
property of public dominion. (See Palanca v. Commonwealth, 69 Phil. 449; see also Bishop of Calbayog v. Director of Lands, L-23481, June 29, 1972, 45 SCRA 418).
(d)
They, as well as their usufruct, cannot be levied upon by
execution, nor can they be attached. (Tufexis v. Olaguera,
32 Phil. 654; Tan Toco v. Mun. Council of Iloilo, 49 Phil.
52).
(e)
In general, they can be used by everybody.
47
Art. 420
(f)
CIVIL CODE OF THE PHILIPPINES
They may be either real or personal property, for it will
be noted that the law here makes no distinction.
(6) Cases
Mun. of Cavite v. Rojas
30 Phil. 602
FACTS: The Municipal Council of Cavite in 1907 withdrew and excluded from public use a part of its plaza in order
to lease same for the benefit of defendant Rojas. Issue was the
validity of the lease.
HELD: The lease is null and void, because streets and plazas are outside the commerce of man, since they are properties
for public use. In creating the lease, the municipality exceeded
its authority because it did something it was not empowered
to do. The lessee must therefore vacate the premises. In turn,
the municipality must reimburse the rentals which had already
been paid to it. (In this case, the lessee had not received any
benefit, from the lease. If there had been such benefit there
might have been no reimbursement of rent, as held in Sanchez
v. Mun. of Asingan, L-17635, Mar. 30, 1963).
[NOTE: While in case of war or during an emergency,
town plazas may be temporarily occupied by private individuals, still, when the emergency ceases, the temporary occupation
or use must also cease. Indeed, a town plaza cannot be used for
the construction of market stalls or of residences. Such structures constitute a nuisance subject to abatement according to
law. (Espiritu, et al. v. Mun. Council of Pozorrubio, Pangasinan,
L-11014, Jan. 21, 1958). Neither may a town plaza be donated
to the Roman Catholic Church. (Harty v. Mun. of Victoria, 13
Phil. 152).].
Commonwealth v. Meneses
38 O.G. 123, p. 2389
FACTS: A fishery was constructed on a river. For many
years, the constructor of the fishery remained in its possession.
Issue: whether or not the constructor has acquired ownership
over said river.
48
CIVIL CODE OF THE PHILIPPINES
Art. 420
HELD: Rivers are not subject to private appropriation.
The law of prescription does not apply to them.
Gobierno Insular v. Naval
(CA) 40 O.G. (11th S) 15, p. 59
FACTS: A registered some esteros in his name under the
Torrens system. Now, under that system, registration is effective against everybody. When the government sought to get
the properties, A pleaded in defense the fact of its registration;
and that although certain properties of public dominion could
not really be registered under that system, still there was no
prohibition in the Land Registration Law regarding rivers and
esteros. Issue: Validity of A’s defense.
HELD: A’s defense will not prosper. Although it is true
that rivers and esteros are not specifically included in the list of
those that could not be registered; still the intention of the law
is plainly to prevent a usurpation of any part of public dominion, rivers and esteros included. It is evident therefore that the
registry obtained by A does not confer any right of ownership
over the portions of the properties of public dominion usurped,
since said usurpation cannot be done under the law.
[NOTE: Portions of the territorial waters of the public
domain not being capable of registration, their inclusion in a
certificate of title does not convert the same into properties of
private ownership or confer title on the registrant. (Republic
v. Ayala Cia, et al., L-20950, May 31, 1965).].
Republic v. Reyes
L-36610, June 18, 1976
FACTS: An applicant for registration of some 23,000
square meters of land won in the CFI (now RTC) in a default
judgment. Later, the government presented a motion for reconsideration, asking for a chance to prove that the land was
public land. When the motion was denied, appeal was made,
but since this was done beyond the reglementary period, the
appeal was considered not perfected. Is there any remedy left
for the Government?
49
Art. 420
CIVIL CODE OF THE PHILIPPINES
HELD: The remedy is to ask for the reversion of inalienable public lands which are erroneously registered in the
name of private individuals. The action is, of course, subject to
defenses that may properly be set up. The Torrens system of
registration is not a means of acquiring ownership over private
or public land; it merely confirms and registers whatever right
or title may already be possessed or had by the applicant.
Republic v. Animas
L-37682, Mar. 29, 1974
Forest lands as such cannot be registered. The mere fact
that a person has a certificate of title over them is unavailing.
Indeed, the doctrine of indefeasibility does not apply here.
Tufexis v. Olaguera
32 Phil. 654
FACTS: During the Spanish regime, A was allowed by the
Spanish government to have the usufruct of a public market
for 40 years. A died, and the usufruct was inherited by B, his
son. When B became indebted, his properties were sold at an
auction sale, and the usufruct was bought by C. Then a fire
destroyed the market. The Council granted B the right to reconstruct the building and continue the usufruct. C complained
on the ground that he had bought at the auction sale B’s usufruct. Issue: Whether or not C can be given the usufruct and
administration of the market.
HELD: C cannot be given the right because the right is
of public character and could not be bought at an auction sale.
What he should have done before the building was burned was
to attach the income already received by B, but C did not do
this. For C now to take B’s place would be contrary to law, for
this would be allowing a stranger who had not been selected
by the government, to take over a public function. On the other
hand, the terms of the concession given to A (B’s father) were
personal and transferable only (by its terms) by inheritance.
C, not being an heir of A, cannot therefore exercise the right.
50
CIVIL CODE OF THE PHILIPPINES
Art. 420
Insular Government v. Aldecoa
19 Phil. 505
FACTS: In 1907, the government demanded from Aldecoa and Co., the possession of a piece of land which had been
formed by the action of the sea. Aldecoa and company claimed
ownership on the ground that the adjacent land was theirs, and
that their erection of a wall was responsible for the forming of
the new parcel of land.
HELD: The land produced by the action of the sea is of
public ownership and cannot therefore be acquired by any private person or entity inasmuch as same belongs to the state.
Furthermore, the company did not ask government permission
to set up the wall.
Government v. Cabangis
53 Phil. 112
FACTS: In 1896, A owned a parcel of land, but because
of the action of the waves of Manila Bay, part of said land was
gradually submerged in the sea. It remained submerged until
1912 when the government decided to make the necessary
dredging to reclaim the land from the sea. As soon as the land
had been recovered A took possession of it. Issue: the ownership
of the reclaimed land.
HELD: The government owns the reclaimed land in the
sense that it has become property of public dominion, because
in letting it remain submerged, A may be said to have abandoned the same. Having become part of the sea or the seashore,
it became property for public use. When the government took
steps to make it land again, its status as public dominion remained unchanged; therefore, A is not entitled to the land.
Mercado v. Mun. Pres. of Macabebe
59 Phil. 592
FACTS: A owned a hacienda in which a river and a creek
flowed. (Both the river and the creek are of course of public
dominion.) A constructed a canal connecting the two bodies of
water, and many people used the canal. One day, 22 years later,
A closed the two openings of the canals, converted same into a
51
Art. 420
CIVIL CODE OF THE PHILIPPINES
fish pond, and prevented the people from using the erstwhile
(former) canal. The government now wants the canal opened
so that same may be used by the general public. A objects.
HELD: The canal should be opened. While the use and
enjoyment of the waters could have been acquired by prescription, still when he allowed others to use the canal, he lost the
exclusive right to use the same. Moreover, although the hacienda
is registered under his name under the Torrens System, this does
not confer upon him any right to the river or creek since these
are properties of public dominion, and cannot be registered.
Clemencia B. Vda. de Villongco, et al. v.
Florencio Moreno, et al.
L-17240, Jan. 31, 1962
FACTS: Mrs. Villongco of Pampanga was accused by
Senator Rogelio de la Rosa of having included as part of her
fishpond in Macabebe, Pampanga, a portion of the coastal
waters of Pampanga and of Manila Bay; and so the Secretary
of Public Works and Communications, Mr. Florencio Moreno,
ordered her to remove said intruding fishpond works and
other constructions. Mrs. Villongco, instead of appealing to
the President, directly brought the case before the courts. She
alleged among other things that under Sec. 2 of Republic Act
No. 2056, constructions made in good faith on navigable rivers
could NOT be ordered removed.
HELD: Firstly, what Mrs. Villongco should have done was
to appeal the administrative decision to the President of the
Philippines, in view of the doctrine of “exhaustion of administrative remedies” before recourse to the courts. (However, to
promptly dispose of the case, the Court decided to dispose of it
on the merits). Secondly, while it is true that under Republic
Act 2056, the Secretary of Public Works and Communications
can order the removal of constructions on navigable rivers or
streams EXCEPT those which had been constructed in GOOD
FAITH and would not impede free passage on the river or cause
the inundation of agricultural areas, still the constructions in
this case although made in GOOD FAITH cannot be considered
as falling under the exception because said constructions were
52
CIVIL CODE OF THE PHILIPPINES
Art. 420
made on COASTAL WATERS. There is no navigable river or
stream in coastal waters, neither may there be inundations
therein. Hence, the constructions may be properly removed or
demolished.
City of Manila v. Garcia
L-26053, Feb. 21, 1967
FACTS: Squatters entered land belonging to the City of
Manila, and constructed dwellings thereon. The lot was a public
lot intended for school purposes. When their occupancy was
officially brought to the attention of the city authorities, some
of the squatters were given “lease contracts’’ by then Mayor
Fugoso. Others received “permits’’ from Mayor de la Fuente.
The squatters were then charged nominal rentals. When the
city decided to use the lot for the expansion of the Epifanio de
los Santos Elementary School, it asked the squatters to vacate
the premises and to remove the improvements. The squatters
refused. The City then sued to recover possession of the lot.
Issue: May the squatters be ejected?
HELD: Yes, for they never really became tenants. The
property being a public one, the Manila mayors did not have
the authority to give permits, written or oral, to the squatters.
The permits granted are, therefore, considered null and void.
C & M Timber Corp. (CMTC) v. Alcala
83 SCAD 346
(1997)
[E]xecutive evaluation of timber licenses and their consequent cancellation in the process of formulating policies with
regard to the utilization of timber lands is a prerogative of the
executive department and in the absence of evidence showing
grave abuse of discretion courts will not interfere with the
exercise of that discretion.
Villarico v. CA
309 SCRA 193
(1999)
Land within which the unclassified forest zone is incapable of private appropriation, a forest land cannot be owned by
53
Art. 420
CIVIL CODE OF THE PHILIPPINES
private persons, and possession thereof, no matter how long,
does not ripen into a registrable title.
Manila International Airport Authority (MIAA) v. CA
495 SCRA 591 (2006)
FACTS: The term “ports” under Art. 420(1) of the Civil
Code includes seaports and airports.
HELD: The MIAA Airport Lands and Buildings constitute
a “port,” constructed by the State.
(7) Public Lands
(a)
Definition
“In acts of Congress of the U.S., the term ‘public
lands’ is uniformly used to describe so much of the national domain under the Legislative Power of Congress as
has not been subjected to private right or devoted to public use … They are that part of government lands which
are thrown open to private appropriation and settlement
by homestead and other like general laws.’’ (Montano v.
Insular Gov’t., 12 Phil. 570). Among the public lands are
mining, forest, and agricultural lands.
[NOTE: While agricultural lands may be sold to or
acquired by private individuals or entities, ownership over
mining and forest lands cannot be transferred, but leases
for them may be had.].
(b)
Classification of Public Lands
It is believed that forest and mining lands are properties of public dominion of the third class, i.e., properties for
the development of the national wealth. Upon the other
hand, the public agricultural lands before being made
available to the general public should also be properties
of public dominion for the development of the national
wealth (and as such may not be acquired by prescription); but after being made so available, they become
patrimonial property of the State, and therefore subject to
prescription. Moreover, once already acquired by private
54
CIVIL CODE OF THE PHILIPPINES
Art. 420
individuals, they become private property. (See U.S. v.
Scurz, 102 U.S. 278).
Nota Bene: “Public agricultural lands’’ may be defined
as those alienable portions of the public domain which are
neither timber nor mineral lands. (Alba Vda. de Raz v.
CA, 314 SCRA 36).
[NOTE: When a homestead entry has been permitted by the Director of Lands, the homestead is segregated
from the “public domain” and the Director is divested of
the control and possession thereof except if the application is finally disapproved and the entry is annulled or
revoked. (Diaz v. Macalinao, et al., L-10747, Jan. 31,
1958).].
[NOTE: Where a license is issued for the taking
of forest products, and a person other than the licensee
unlawfully operates without license and cuts or removes
any forest products, the same may be seized and delivered
to the proper licensee, upon the payment of the regular
charges thereon. (Cotabato Timberland Co., Inc. v. Plaridel Lumber Co., Inc., L-19432, Feb. 26, 1965).].
Bureau of Forestry, et al. v. CA
GR 37995, Aug. 31, 1987
Can the classification of lands of the public domain
by the executive branch of the government into agricultural, forest, or mineral be changed or varied by the court
depending upon the evidence adduced before it?
Whether a particular parcel of land is more valuable for forestry purposes than for agricultural purposes,
or vice versa, is a fact which must be established during
the trial of a cause. Whether the particular land is agricultural, forestry or mineral is a question to be settled in
each particular case unless the Bureau of Forestry has,
under the authority conferred upon it by law, prior to the
intervention of private interest, set aside said land for
forestry or mineral resources.
It is the Bureau of Forestry that has the jurisdiction
and authority over the demarcation, protection, manage55
Art. 420
CIVIL CODE OF THE PHILIPPINES
ment, reproduction, occupancy and use of all public forests
and forest reservations and over the granting of licenses
for the taking of products therefrom, including stone and
earth. (Sec. 1816, Revised Administrative Code).
As provided for under Section 6 of Commonwealth
Act 141, which was lifted from Act 2874, the classification
or reclassification of public lands into alienable or disposable, mineral or forest lands is now a prerogative of the
executive department of the government and not of the
courts.
There should be no room for doubt that it is not the
court which determines the classification of lands of the
public domain into agricultural, forest or mineral but the
executive branch of the government, thru the Office of
the President. It is grave error and/or abuse of discretion
for a trial court to ignore the uncontroverted facts that
(1) the disputed area is within the timberland block, and
(2) as certified to by the Director of Forestry, the area is
needed for forest purposes.
One cannot claim to have obtained his title by prescription if the application filed by him necessarily implied
an admission that the portion applied for is part of the
public domain which cannot be acquired by prescription,
unless the law expressly permits it. Possession of forest
land, however long, cannot ripen into private ownership.
Republic v. CA
GR 40402, Mar. 16, 1987
Section 48(b) of Commonwealth Act 141, as amended,
applies exclusively to public agricultural lands. Forest
lands or areas covered with forests are excluded. They
are incapable of registration and their inclusion in a
title, whether such title be one issued during the Spanish sovereignty or under the present Torrens System of
registration, nullifies the title. Thus, possession of forest
lands, however long, cannot ripen into private ownership.
A parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and
56
CIVIL CODE OF THE PHILIPPINES
Art. 420
jurisdiction of the cadastral court to register under the
Torrens System.
Alvarez v. PICOP Resources, Inc.
508 SCRA 498 (2006)
FACTS: Licenses concerning the harvesting of timber, in the country’s forests cannot be considered contracts
that would bind the Government regardless of changes in
policies and the demands of public interest and welfare.
Issue: When the licenses, concessions, and the like entail
government infrastructure projects, should the provisions
of RA 8975 be deemed to apply?
HELD: Yes. RA 8975 prohibits lower courts from issuing temporary restraining orders (TROs), preliminary
injunctions and preliminary mandatory injunctions in
connection with the implementation of government infrastructure projects, while PD 605 prohibits the issuance of
the sum in any case involving licenses, concessions, and
the like in connection with the natural resources of the
Philippines.
QUERY
Are “public forests” inalienable public lands?
ANS.: Yes. (Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,
500 SCRA 209 [2006]).
Exploration Permits are Strictly Granted to Entities or Individuals Possessing the Resources and
Capability to Undertake Mining Operations
Apex Mining Co., Inc. v. Southeast Mindanao
Gold Mining Corp.
492 SCRA 355 (2006)
FACTS: Mining operations in the Diwalwal Mineral Reservation are within the full control of the State
thru the Executive Branch –– pursuant to Sec. 5 of RA
7942. Here, the State can either directly undertake the
57
Art. 420
CIVIL CODE OF THE PHILIPPINES
exploration, development, and utilization of the area or it
can enter into agreements with qualified entities. Issue:
What is the extent or scope of power of administration,
over mineral lands and minerals vested on the Director
of Mines and Geo-Sciences?
HELD: This includes the power to prescribe terms
and conditions in granting exploration permits to qualified entities. Exploration permits are strictly granted
to entitites or individuals possessing the resources and
capability to undertake mining operations. Nonetheless,
the State may not be precluded from considering a direct
takeover of the mines, if it is only plausible remedy in
sight to the gnawing complexities generated by the socalled “gold rush.”
[NOTE: By providing a 5-day period within which
to file an appeal on the decision of the Director of Mines
and Geo-Sciences, PD 463 unquestionably repealed Sec.
61 of Commonwealth Act 137. (PNOC Energy Development Corp. {PNOC-EDC} v. Veneracion, Jr., 509 SCRA
93 {2006}).].
[NOTE: Sec. 18 of RA 7942 allows mining even in
timberland or forestry subject to existing rights and reservations. (PICOP Resources, Inc. v. Base Metal Mineral
Resources Corp., 510 SCRA 400 {2006}).].
(c)
Governing Law
Public lands may be disposed of in accordance with
Commonwealth Act 141. The disposition of public lands is
lodged exclusively in the Director of Lands, subject only
to the control of the Secretary of Agriculture. Preference
of tenants in their acquisition is in accord with the policy
of the government of permitting tenants of public agricultural lands to acquire by purchase or by homestead their
respective landholdings. (Pindangan Agricultural Co., Inc.
v. Dans, et al., L-14591, Apr. 25, 1962).
Sec. 64(e) of the Revised Administrative Code empowers the President to reserve alienable public lands for
a specific public purpose or service, and under the Public
Land Act, to release those reserved. (Republic v. Oct.,
L-18867, Apr. 30, 1966).
58
CIVIL CODE OF THE PHILIPPINES
Art. 420
[NOTE: The word “Government lands’’ is not synonymous with “Public lands.’’ The first is broader in scope,
and may be said to include also those lands devoted to
public use or public service, as well as public lands “before
and after they are made available for private appropriation,’’ and also patrimonial lands. Upon the other hand,
as has already been seen “public lands’’ are merely a part
of “government lands.’’].
(d)
Non-Conversion Into Private Property
If a portion of the public land either is needed for
river bank protection or forms part of a permanent timberland, possession thereof, however long cannot convert
it into private property. Such portion falls within the exclusive jurisdiction of the Bureau of Forestry, and beyond
the jurisdiction of the cadastral court to register under the
Torrens system. (Adorable, et al. v. Director of Forestry,
L-13663, Mar. 25, 1960).
(e)
Disposition by Public Bidding
When the Public Land Law decreed that public
lands shall be sold to the highest bidder, it does not necessarily follow that the Government is thereby engaged
in profit-making; it is getting money in exchange for its
property. Upon the other hand, knowingly to sell public
property at 1/20 of its price is not selling; it is donating.
Such sale is invalid because the land officer, in donating,
has exceeded his power to sell. In every public bidding
the winner prejudices the loser; yet this is no reason to
disqualify him; that in itself is NOT bad faith, for he is
merely exercising the right to buy. (Ladrera v. Secretary
of Agriculture and National Resources, L-13385, Apr. 28,
1960).
(8) Ownership of Roman Catholic Churches
There is no question that Roman Catholic churches
constructed after the Spanish occupation are owned by the
Catholic Church itself, which incidentally is a juridical person.
But the churches constructed during the Spanish regime, and
built with “forced labor” were considered outside the com59
Art. 420
CIVIL CODE OF THE PHILIPPINES
merce of man because they were sacred, devoted as they were
to the worship of God (there was then a union of Church and
State). Said churches therefore did not belong to the public in
general, nor to the State, nor to any private individual, nor to
the priests, nor to the Church itself. But certainly, the Church
had the possession and control of the churches. And it is not
necessary or important to give any name to this right of possession and control exercised by the Roman Catholic Church
in the church buildings of the Philippines prior to 1898. (See
Barlin v. Ramirez, 7 Phil. 41).
(9) The Ecclesiastical Provinces
The naked ownership of the ecclesiastical provinces donated to the Church belongs to the Roman Catholic Church;
the use is for the worshippers. (Trinidad v. Roman Catholic
Archbishop of Manila, 63 Phil. 881).
(10) Effect of the Separation of Church and State in the
Philippines
One important effect of the separation of Church and State
in the Philippines, insofar as ownership of things is concerned,
is that now, there is nothing that will prohibit the churches
from alienating any of the properties denominated in canon
law as holy or sacred.
(11) Public Land Act
Bracewell v. CA
GR 107427, Jan. 25, 2000
119 SCAD 47
The Public Land Act requires that the applicant must
prove: (a) that the land is alienable public land; and (b) that
his open, continuous, exclusive and notorious possession and
occupation of the same must be since time immemorial or for
the period prescribed in the Public Land Act.
When the conditions set by law are complied with, the
possessor of the lands, by operation of law, acquires a right to
a grant, a government grant, without the necessity of a certifi60
CIVIL CODE OF THE PHILIPPINES
Art. 421
cate of title being issued. The adverse possession which may
be the basis of a grant of title or confirmation of an imperfect
title refers only to alienable or disposable portions of the public
domain.
(12) Parity Rights Amendment of 1946
Ancheta v. Guersey–Dalayyon
490 SCRA 140 (2006)
As it now stands, Art. XII, Secs. 7 and 8 of the 1987
Philippine Constitution explicitly prohibits non-Filipinos from
acquiring or holding title to private lands or to lands of the
public domain.
Art. 421. All other property of the State, which is not of
the character stated in the preceding article, is patrimonial
property.
COMMENT:
(1) ‘Patrimonial Property’ Defined
Patrimonial property of the State is the property it owns
but which is not devoted to public use, public service, or the
development of the national wealth. It is wealth owned by the
State in its private, as distinguished from its public, capacity.
Sanchez v. Mun. of Asingan
L-17635, Mar. 30, 1963
FACTS: On a municipal patrimonial lot, plaintiff constructed in 1952 temporary stores and buildings, with the
knowledge and implied consent of the municipality. In 1959,
however, the municipal council passed a resolution calling
for the ejectment of the plaintiff. The plaintiff refused to be
ejected and in the alternative, asked the court that in case he
is ejected, he must be reimbursed for the rents already paid.
Plaintiff relied on the case of Mun. of Cavite v. Rojas (30 Phil.
602), where the court had declared the lease of the public plaza
void, and ordered the reimbursement of the rentals. Issue:
Should the rents be reimbursed?
61
Art. 421
CIVIL CODE OF THE PHILIPPINES
HELD: There should be NO reimbursement. Firstly, the
case of Rojas CANNOT apply for there, the lot was public, here,
it is patrimonial. Secondly, assuming that the lot is public, and
that therefore the lease is void, still there will be no reimbursement because the plaintiff had received some benefit from the
land.
(2) Other Examples of Patrimonial Property
(a)
Friar lands. (Jacinto v. Director of Lands, 49 Phil. 853).
They may be disposed of in accordance with the provisions
of Act 1120.
[NOTE: Under the Friar Lands Act (Act 1120), conveyance executed in favor of a purchaser, or the so-called
certificate of title is a conveyance of the ownership of the
property, subject only to the resolutory condition that the
sale may be cancelled if the price agreed upon is not paid
in full. Thus, if a husband has purchased said land, on his
death, the certificate may be issued in favor of his widow.
In default of the widow, the assignment must be made in
favor of the successional heirs. It should be noted, however, that the issuance of the title to the wife does NOT
make the friar lands purchased by the deceased husband
the paraphernal property of the wife. The lands continue
to be the conjugal property of her deceased husband and
herself. (Pugeda v. Trias, L-16925, July 24, 1962). In the
case, however, of a sale of PUBLIC LANDS under the
Public Land Act, there would seem to be no vested right
on the property purchased by the mere fact of application
therefor. This is because aside from the purchase, there
are requirements for cultivation and improvement. Hence,
if the applicant dies before fulfillment of said requisites,
and the widow and her second husband should comply
with the requirements, the certificate is issued to said
wife and her second husband, each of them having equal
rights on the land. (Pugeda v. Trias, et al., supra).].
Dela Torre v. CA
GR 113095, Feb. 8, 2000
Jurisprudence has consistently held that under Act
1120, the equitable and beneficial title to the land passes
62
CIVIL CODE OF THE PHILIPPINES
Art. 421
to the purchaser the moment the first installment is paid
and a certificate of sale is issued.
In order that a transfer of the rights of a holder of a
certificate of sale of friar lands may be legally effective, it
is necessary that a formal certificate of transfer be drawn
up and submitted to the Chief of the Bureau of Public
Lands for his approval and registration. The law authorizes no other way of transferring the rights of a holder of
a certificate of sale of friar lands.
(b)
The San Lazaro Estate. (Tipton v. Andueza, 5 Phil. 477).
This may be disposed of, and is governed by Act 2360 as
amended by Act 2478.
(c)
Properties obtained by the Government in escheat proceedings (as when there is no other legal heir of a decedent), or
those inherited by or donated to the Government. Rents
of buildings owned by the State would also come under
this classification. (See 3 Manresa 96).
(d)
A municipal-owned waterworks system is patrimonial in
character, for while such a system is open to the public (in
this sense, it is public service), still the system serves only
those who pay the charges or rentals (thus, the system
is PROPRIETARY). Therefore, Republic Act 1383 which
vests on the NAWASA, ownership of municipal water
system without compensation (to the municipality) cannot
be sustained as valid. (City of Cebu v. NAWASA, L-12892,
Apr. 30, 1960; Municipality of Lucban v. National Waterworks and Sewerage Authority, L-15525, Oct. 11, 1960;
Board of Assessment Appeals, Prov. of Laguna v. Court of
Tax Appeals, L-18125, May 31, 1963).
(3) Acquisition of Patrimonial Properties thru Prescription
Patrimonial properties may be acquired by private individuals or corporations thru prescription. (Art. 1113). However,
if a municipality has been taking the products of a certain
parcel of land, and planting thereon certain other crops, this
is not proof of ownership, but only of the USUFRUCT thereof.
(See Mun. of Tigbawan v. Dir. of Lands, 35 Phil. 798).
63
Art. 422
CIVIL CODE OF THE PHILIPPINES
Art. 422. Property of public dominion, when no longer
intended for public use or for public service, shall form part
of the patrimonial property of the State.
COMMENT:
(1) Conversion of Property of Public Dominion to Patrimonial Property: Entities that may Effect the Change
In Faustino Ignacio v. Dir. of Lands, L-12958, May 30,
1960, the Supreme Court, citing Natividad v. Dir. of Lands (CA)
(37 O.G., p. 2905), said that only the executive and possibly the
legislative departments have the authority and power to make
the declaration that any land so gained by the sea is not necessary for purposes of public utility, or for the establishment of
special industries or for Coast Guard Service. If no such declaration has been made by said departments, the lot in question
forms part of the public domain. Consequently, until there is
made a formal declaration on the part of the Government thru
the executive department or the legislature, the parcel in question continues to be part of the public domain, and cannot be
subject to acquisitive prescription.
[NOTE: This case involved lands gained by the sea which
thus are considered properties of the public dominion under
Art. 4 of the Spanish Law of Waters of Aug. 3, 1866.].
(2) Cases
Municipality of Oas v. Roa
7 Phil. 20
When a municipality no longer uses a public plaza as
such, and instead constructs buildings thereon for storage of
government property, or for housing purposes, it is clear that
the property has become patrimonial. Being patrimonial, same
may, from that moment on, be sold to a private individual.
Cebu Oxygen and Acetylene Co., Inc.
v. Bercilles
L-40474, Aug. 29, 1975
FACTS: The City Council of Cebu, in 1968, considered as
an abandoned road, the terminal portion of one of its streets.
64
CIVIL CODE OF THE PHILIPPINES
Art. 422
Later it authorized the sale thru public bidding of the property.
The Cebu Oxygen and Acetylene Co. was able to purchase the
same. It then petitioned the RTC of Cebu for the registration
of the land. The petition was opposed by the Provincial Fiscal
(Prosecutor) who argued that the lot is still part of the public
domain, and cannot therefore be registered. Issue: May the lot
be registered in the name of the buyer?
HELD: Yes, the land can be registered in the name of the
buyer, because the street has already been withdrawn from
public use, and accordingly has become patrimonial property.
The lot’s sale was therefore valid.
Mun. of Hinunang v. Director of Lands
24 Phil. 125
Although a fortress as such is property of public dominion
because it is for public service, still when it is no longer used
as such, it does not necessarily follow that the State has lost
ownership over the same inasmuch as the property is now
considered patrimonial, and therefore still belongs to the state.
What is true of the fortress is also true of the land on which it
has been built.
Francisco Chavez v. NHA, et al.
GR 164527, Aug. 15, 2007
FACTS: Presidential Proclamation Nos. 39 and 465 jointly
with the special patents have classified the reclaimed lands
as alienable and disposable and open to disposition or concession as they would be devoted to units for Smokey Mountain
beneficiaries. Issue: Because said lands are no longer intended
for public use or service, shall those lands form part of the
patrimonial properties of the State?
HELD: Yes, under Art. 422 of the new Civil Code. The
lands are classified as patrimonial parties of the NHA in the
case at bar, and ready for disposition when the titles are registered in its name by the Register of Deeds.
(3) Different Rule for Abandoned River Beds
Although, as a rule, property of public dominion when no
longer used for public service, shall form part of the patrimo65
Art. 423
CIVIL CODE OF THE PHILIPPINES
nial property of the State (Art. 422), it should be remembered
that under Art. 461, an abandoned river bed belongs not to the
State, but to the private land owner whose land is now occupied
by the changed course, in proportion to the area lost.
Art. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property.
COMMENT:
(1) ‘Reclaimed Lands’
These are not plain and simple patches of the earth as
agricultural, timber, or mineral lands are, in the full sense of
being products of nature, but are the result of the intervention
of man just like in the extraction of mineral resources, i.e.,
gold, oil, petroleum, etc. (Chavez v. PEA, 403 SCRA 1 [2003]).
In terms of the long-range development of the country, its fundamental law vests the State with the concomitant authority
to draw on the resources of the private sector, to aid it in such
an awesome endeavor as land reclamation. (Chavez v. PEA, 415
SCRA 403 [2003]). For “reclaimed land’’ does not fall under the
category of natural resources which under the Constitution are
inalienable; it is statutory law which determines the status of
reclaimed land. (Ibid.)
[NOTE: “Submerged lands’’ are owned by the State and
are inalienable; submerged lands, like the waters (sea or bay)
above them, are part of the State’s inalienable natural resources. (Chavez v. PEA, supra).].
Case
Chavez v. Public Lands Authority
415 SCRA 403
(2003)
FACTS: Contracts of individuals who, not being personally disqualified to hold alienable lands of the public domain,
66
CIVIL CODE OF THE PHILIPPINES
Art. 423
have been able to acquire in good faith, reclaimed portions of
the subject property from AMARI Coastal Bay Development
Corporation. Issue: Should said contracts be duly-respected
and upheld?
HELD: Yes. In instances where the successor-in-interest is itself a corporate entity, the constitutional proscription
would stand, but if the corporation has introduced structures or
permanent improvements thereon, such structures or improvements, when so viewed, as having been made in good faith,
could very well be governed by the new Civil Code.
The approval of the contracts, in the case at bar, clearly
and unambigously attested to the fact that the lands in question were no longer intended for “public use’’ or “public service.’’ When the conversion activity such as co-production, joint
venture or production-sharing agreements is authorized by the
Government thru a law, the qualified party to the agreement
may own the converted product or part of it, when so provided
in the agreement. If there is any doubt as “to the object of the
prestation in this case, the Supreme Court opined that the
‘interpretation which would render the contract valid is to be
favored.’’’
(2) Properties of Political Subdivisions
(a)
property for public use
(b)
patrimonial property
(3) Alienation of the Properties
(a)
Properties of a political subdivision for public use cannot
be alienated as such, and may not be acquired by prescription. (Mun. of Oas v. Roa, 7 Phil. 20).
(b)
Properties of a political subdivision which are patrimonial
in character may be alienated, and may be acquired by
others thru prescription. (Mun. of Oas v. Roa, supra; Art.
1113).
67
Art. 423
CIVIL CODE OF THE PHILIPPINES
(4) Donation by the National Government to a Political
Subdivision
The National Government may donate its patrimonial
property to a municipality, and the latter may own the same.
(Mun. of Catbalogan v. Dir. of Lands, 17 Phil. 216). This is
because a municipality is a juridical person capable of acquiring
properties. When thus donated, the property becomes either
property for public use or patrimonial property, depending
on the use given to the property. When for example, the municipality devotes donated land to the erection thereon of the
municipal building, courthouse, public school, or public market,
the property is for public use. When, however, it allows private
persons to build on it, and merely collects for example, the rentals on the land, the property is patrimonial in character. (Mun.
of Hinunang v. Director of Lands, 24 Phil. 125). The acquisition
by a city of portions of public lands is subject to the rules and
regulations issued by the proper governmental authorities,
as well as the subsequent approval of such acquisition by the
Director of Lands. (City of Cebu v. Padilla, et al., L-20393, Jan.
30, 1965).
Central Bank of the Philippines
v. Court of Appeals and Ablaza Construction
and Finance Corporation
L-33022, Apr. 22, 1975
ISSUE: Are the terms “National Government of the Philippines” and “Government of the Philippines” synonymous?
HELD: No, because the first term “National Government
of the Philippines” is more restrictive and does not include
local governments or other governmental entities. Under the
Administrative Code itself, the term “National Government”
refers only to the Central Government (consisting of the legislative, executive, and judicial departments of the government), as
distinguished from local governments and other governmental
entities. The Central Bank (Bangko Sentral) is, therefore, not
included in the term “National Government,” but is included
in the term “Government of the Philippines.”
68
CIVIL CODE OF THE PHILIPPINES
Art. 424
(5) Conversion to Patrimonial
Of course, by analogy, and applying Art. 422, when a municipality’s properties for public use are no longer intended for
such use, the properties become patrimonial, and may now be
the subject of a common contract. (See 3 Manresa 111).
Art. 424. Property for public use, in the provinces, cities and municipalities consist of the provincial roads, city
streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid
for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice
to the provisions of special laws.
COMMENT:
(1) Properties in Political Subdivisions
Art. 424 enumerates the various kinds of properties of
political subdivisions, and classifies them into:
(a)
property for public use
Dacanay v. Asistio, Jr.
208 SCRA 404
(1992)
A public street is property for public use, hence, outside the commerce of man and may not be the subject of
lease or of any other contract. The right of the public to use
the city streets may not be bargained away thru a contract.
Thus, Mayor Robles’ Executive Order may not infringe
upon the vested right of the public to use city streets for
the purpose they were intended to serve, i.e., as arteries
of travel for vehicles and pedestrians.
(b)
patrimonial property
[NOTE: In the case of STATE properties, properties
for public service are of public dominion; this is not so in
69
Art. 424
CIVIL CODE OF THE PHILIPPINES
the case of provinces, cities, etc., said properties for public
service are patrimonial (since they are not for public use).
(Prov. of Zamboanga del Norte v. City of Zamboanga, et
al., L-24440, Mar. 28, 1968).].
Province of Zamboanga Del Norte v.
City of Zamboanga, et al.
L-24440, Mar. 28, 1968
FACTS: After Zamboanga Province was divided
into two (Zamboanga del Norte and Zamboanga del Sur),
Republic Act 3039 was passed providing that —
“All buildings, properties, and assets belonging
to the former province of Zamboanga and located
within the City of Zamboanga are hereby transferred
free of charge in favor of the City of Zamboanga.’’
Suit was brought alleging that this grant without
just compensation was unconstitutional because it deprived the province of property without due process. Included in the properties were the capital site and capitol
building, certain school sites, hospital and leprosarium
sites, and high school playgrounds.
Issues: a) Are the properties mentioned, properties
for public use or patrimonial? b) Should the city pay for
said properties?
HELD: a) If we follow the Civil Code classification,
only the high school playgrounds are for public use (in
the sense that generally, they are available to the general
public), and all the rest are PATRIMONIAL (since they
are not devoted to public use but to public service; since
they are not for public use, under Art. 424 of the Civil
Code, they are patrimonial. [NOTE: For public use if
ANYBODY can use; for public service if only AUTHORIZED persons can use.].
[NOTE: Had they been owned by the STATE, they
would not have been patrimonial but would have been
properties of public dominion — for this would include
public service, conformably with Art. 420, par. 2.].
70
CIVIL CODE OF THE PHILIPPINES
Art. 424
BUT if we follow the law of Municipal Corporations
(and not the Civil Code), as long as the purpose is for a
public service (governmental service like public education,
public health, local administration), the property should
be considered for PUBLIC USE.
b)
If the Civil Code classification is used, since
almost all the properties involved are patrimonial, the
law would be unconstitutional since the province would be
deprived of its own property without just compensation.
If the law on Municipal Corporations would be followed, the properties would be of public dominion, and
therefore NO COMPENSATION would be required.
It is this law on Municipal Corporations that should
be followed. Firstly, while the Civil Code may classify them
as patrimonial, they should not be regarded as ordinary
private property. They should fall under the control of the
State, otherwise certain governmental activities would be
impaired. Secondly, Art. 424, 2nd paragraph itself says
“without prejudice to the provisions (or PRINCIPLES) of
special laws.”
(2) Basis of the Classification
Apparently under Art. 424, the basis of the classification
would be the use, however, in Salas v. Jarencio, L-29788, Aug.
30, 1972, the Supreme Court ruled that the National Government still controls the disposition of properties of political
subdivisions (regardless of the use to which they are devoted)
provided that the properties CAME FROM THE STATE. The
Court further said that in the absence of proof that the province, city, or municipality acquired the properties with their
own funds, we should PRESUME that they really had come
from the State.
Thus, it can be said that properties of provinces, cities,
and municipalities may also be classified into the following:
(a)
those acquired with their own funds (in their private or
corporate capacity) — here the political subdivision has
ownership and control.
71
Art. 424
(b)
CIVIL CODE OF THE PHILIPPINES
those which do not fall under (a) — these are subject to
the control and supervision of the state. In fact, they are
held by the political subdivision in trust for the state for
the benefit of the inhabitants (whether the purpose of the
property is governmental or proprietary). Reason the political subdivision owes its creation to the State. It is the
State’s agents, or subdivision, or instrumentality for the
purposes of local administration.
Salas v. Jarencio
L-29788, Aug. 30, 1972
FACTS: The City of Manila had a Torrens Title over a
7,490-square-meter lot. The municipal board of Manila requested the President of the Philippines to have the lot declared
as patrimonial property of the City so that it could be sold by
the City to the actual occupants of the lot. In 1964, Congress
enacted Republic Act 4118 whereby the lot was made disposable
or alienable land of the State (not of the City), and its disposal
was given to a national governmental entity, the Land Tenure
Administration.
Issue: Can this be lawfully done by the National Government?
HELD: Yes. There being no proof that the lot had been
acquired by the City with its own funds, the presumption is
that it was given to it by the State IN TRUST for the benefit
of the inhabitants. Residual control remained in the State, and
therefore the STATE can lawfully dispose of the lot. Thus, Republic Act 4118 is valid and constitutional and this is so even
if the City of Manila will receive NO COMPENSATION from
the State.
(3) Rules With Respect to Properties for Public Use
Properties for public use may not be leased to private
individuals. If possession has already been given, the lessee
must return the possession to the municipality, which in turn
must reimburse him for whatever advanced rentals had been
given. (Mun. of Cavite v. Rojas, 30 Phil. 602). If a plaza is illegally leased to private individuals, the lease is void, and any
72
CIVIL CODE OF THE PHILIPPINES
Art. 424
building on said plaza built by the “lessee” such as a restaurant, may be demolished. (Capistrano, et al. v. Mayor, et al.,
CA 44 O.G. 2798). Properties used by a municipal corporation
in the exercise of its governmental powers cannot be attached
or levied upon. (Viuda de Tan Toco v. Mun. Council of Iloilo,
49 Phil. 52). The right to settle boundary disputes between
municipalities is vested by law on the provincial board of the
province concerned, from the decision of which board, appeal
may be taken by the municipality aggrieved to the Executive
Secretary, now Office of the President, whose decision shall be
final. Until the matter is resolved by such official (now office),
judicial recourse would be premature. If the provincial board
fails to settle the boundary dispute, the action if at all, would
be one against said board, not an action for declaratory relief.
(Municipality of Hinabangan, et al. v. Mun. of Wright, et al.,
L-12603, Mar. 25, 1960).
Viuda de Tan Toco v. Mun. Council of Iloilo
49 Phil. 52
FACTS: The municipality of Iloilo bought from the widow
of Tan Toco a parcel of land for P42,966.40 which was used for
street purposes. For failure of the municipality to pay the debt,
the widow obtained a writ of execution against the municipal
properties, and by virtue of such writ was able to obtain the
attachment of two auto trucks used for street sprinkling, one
police patrol automobile, two police stations, and two markets,
including the lots on which they had been constructed. The
issue is the validity of the attachment.
HELD: The attachment is not proper because municipal-owned real and personal properties devoted to public or
governmental purposes may not be attached and sold for the
payment of a judgment against a municipality. Just as it is
essential to exempt certain properties of individuals (like the
bare essentials) from execution, so it is also essential and
justifiable to exempt property for public use from execution,
otherwise governmental service would be jeopardized.
[NOTE: Had the properties been patrimonial, they could
have been levied upon or attached. (See Mun. of Pasay v. Manaois, et al., L-3485, June 30, 1950).].
73
Art. 424
CIVIL CODE OF THE PHILIPPINES
(4) Effect if Private Land is Donated to a Town and Made
into a Plaza
Private land donated to a town for use as a plaza becomes
property for public use, and may not in turn be donated by the
town to the church, nor can the church acquire ownership over
it by prescription, for a town plaza is outside the commerce of
man. (Harty v. Mun. of Victoria, 13 Phil. 152). Such a plaza
cannot be deemed patrimonial property of a municipal government. (Mun. of San Carlos v. Morfe, L-17990, July 24, 1962).
Harty v. Municipality of Victoria
13 Phil. 152
FACTS: A parcel of land alleged to originally belong to
a person named Tanedo was in part donated by him to the
church. The remaining part was kept open as a plaza. For
many years, the people of the town were allowed by Tanedo to
use the said remainder as a “public plaza.” Later, the church
claimed ownership over said “plaza” on the ground that the
same had been donated to it by the municipality. It was proved
that the curates and the town heads (the gobernadorcillos) used
to plant fruit trees on the plaza. Issue: May the church now be
considered as the owner of the plaza?
HELD: No, the Church cannot be regarded as the owner
of the plaza. Assuming that Tanedo was its original owner,
still when he allowed the people of the town to use same as a
public plaza, he was in effect waiving his right thereto for the
benefit of the town folks. Being property for public use, the
municipality cannot be said to have validly donated it in favor
of the Church. Then again, because of its being for “public use,’’
the plaza could not have been acquired by the Church thru
prescription. Incidentally, the act of planting fruit trees on the
plaza cannot be regarded as an act of private ownership. It was
simply an act intended to enhance the beauty of the plaza for
the benefit of the people in the community.
(5) National Properties May Not Be Registered by a Municipality Under its Own Name
Properties of public dominion, owned by the national
government, even if planted upon with trees by a municipal74
CIVIL CODE OF THE PHILIPPINES
Art. 425
ity for a number of years, do not become municipal properties,
and may not therefore be registered by a municipality under
its name. (Mun. of Tigbawan v. Dir. of Lands, 35 Phil. 798).
(6) Patrimonial Property of a Municipal Corporation
The town’s patrimonial property is administered, at least
insofar as liability to third persons is concerned, in the same
way as property of a private corporation. Hence, the town is
not immune to suits involving this kind of property. (Dillon,
Mun. Corp., 5th Ed., Sec. 1610). The municipal council serves
as a sort of Board of Directors, with the municipal mayor or
provincial governor as general manager. (See Mendoza v. De
Leon, 33 Phil. 508; People v. Fernandez, et al., [CA] 1128-R,
May 29, 1948).
(7) Case
Alonso v. Cebu Country Club, Inc.
417 SCRA 115
(2003)
Possession of patrimonial property of the Government,
whether spanning decades, or centuries, cannot ipso facto ripen
into ownership.
In the instant controversy, however, the majority DECISION actually awarded to the Government ownership of the
disputed property, without notice to both parties and without
giving them an opportunity to be heard and submit their opposition.
Art. 425. Property of private ownership, besides the
patrimonial property of the State, provinces, cities, and
municipalities, consists of all property belonging to private
persons, either individually or collectively.
COMMENT:
(1) Private Properties Other than Patrimonial
Other private properties are those that belong to private
persons: individually or collectively. Incidentally, by virtue of
Art. 425, the Code recognizes the rights to private property.
75
Art. 425
CIVIL CODE OF THE PHILIPPINES
(2) Collective Ownership
“Collectively’’ refers to ownership by private individuals
as co-owners; or by corporations, partnerships, or other juridical persons (such as foundations) who are allowed by the Civil
Code to possess and acquire properties. (Arts. 44-47).
(3) Effect of Possession by Private Persons
Possession by private persons since time immemorial carries the presumption that the land had never been part of the
public domain, or that it had been private property even before
the Spanish conquest. An allegation to this effect is a sufficient
averment of private ownership. (Nalayan, et al. v. Nalayan, et
al., L-14518, Aug. 29, 1960; Oh Cho v. Dir. of Lands, 75 Phil.
890; Cariño v. Insular Gov’t., 212 U.S. 449).
(4) Ownership of Roads
Roads may be either public or private property; hence, if
a person constructs on his own land a road, it is a private one.
This is particularly true when the government spent nothing
for the construction of the road. (See Cuaycong v. Benedicto,
37 Phil. 781).
(5) Private Lands Within a Military Zone
If private lands of a person should lie within a military
zone, said lands do not necessarily become property of public
dominion (public service). (Inchausti and Co. v. Commanding
General, 6 Phil. 556).
[NOTE: If there be fortified places in said zone, Art. 667
applies. “No construction can be built or plantings made near
fortified places or fortresses without compliance with the conditions required in special laws, ordinances, and regulations
relating thereto.” (Art. 667). This restriction does not mean that
the private person is deprived of the ownership of said private
land.].
76
CIVIL CODE OF THE PHILIPPINES
Art. 425
(6) Improvements Introduced by the Japanese Occupation
Forces on Private Lands
Improvements constructed during the Japanese occupation by the Japanese army on private lands do not belong to
the private owner but to the Philippine government which
emerged as victor in the last world war. Such improvements
may refer to railroad tracks or to passageways for airplanes.
On the other hand, an automobile seized by the Japanese army
from a Filipino during the war, and later turned over to the
Philippine government, does not become government property,
and when sold by the Philippine government to another private
person, the true owner of the car may recover same from the
buyer. (See Saavedra v. Pecson, L-260, Mar. 25, 1944).
(7) Ownership Evidenced by a Torrens Title
If there is any error in the Torrens title of a person in the
sense that it includes lands belonging to the government, it is
only the government which can properly question that fact,
and a judicial pronouncement is necessary in order to have
the portion excluded from the Torrens title. (Zobel v. Mercado,
L-14515, May 25, 1960).
Salamat Vda. de Medina v. Cruz
GR 39272, May 4, 1988
A Torrens title is generally a conclusive evidence of the
ownership of the land referred to therein. (Sec. 49, Act 496). A
strong presumption exists that Torrens titles are regularly issued and that they are valid. A Torrens title is incontrovertible
against any informacion possessoria or title existing prior to the
issuance thereof not annotated on the title. All persons dealing
with property covered by Torrens Certificate of Title are not
required to go beyond what appears on the face of the title.
Payment of land tax is not an evidence of ownership of
a parcel of land for which payment is made, especially when
the parcel of land is covered by a Torrens title in the name of
another.
77
Art. 425
CIVIL CODE OF THE PHILIPPINES
Metropolitan Waterworks & Sewerage
System v. CA
215 SCRA 783
(1992)
A certificate is not conclusive evidence of title if it is shown
that the same land had already been registered and an earlier
certificate for the same is in existence.
(8) Acquisition by Aliens
An alien has had no right to acquire since the date of effectivity of the Philippine Constitution, any public or private
agricultural, commercial, or residential lands (except by hereditary succession). (Krivenko v. Register of Deeds). The same rule
applies to a foreign corporation, even if it be a religious and
non-stock foreign corporation. (See Art. XII, Sec. 3 of the 1987
Phil. Constitution). This is not contrary to religious freedom
because the ownership of real estate is not essential for the
exercise of religious worship. (Ung Sui Si Temple v. Reg. of
Deeds, L-6776, May 21, 1955).
The constitutional prohibition against the acquisition of
land by aliens (save Americans by virtue of the Parity Amendment) is ABSOLUTE. Thus, the transfer of ownership over land
in favor of aliens is not permissible in view of the constitutional
prohibition. (Reg. of Deeds of Manila v. China Banking Corporation, L-11964, Apr. 28, 1962; See Art. XII, Sec. 3 of the 1987
Phil. Constitution).
Paragraph (c), Sec. 25 of Republic Act 337 allows a commercial bank to purchase and hold such real estate as shall be
conveyed to it in satisfaction of debts previously contracted in
the course of its dealings. The debts referred to are only those
resulting from previous loans and other similar transactions,
not those conveyed to it by reason of “civil liability” arising
from a criminal offense against it, even if the acquisition of
ownership by the bank is merely TEMPORARY. (Ibid.).
(9) Query
What should an applicant establish to prove that the land
subject of an application for registration is alienable?
78
CIVIL CODE OF THE PHILIPPINES
Art. 426
ANS.: An applicant must establish the existence of a positive act of the government such as a presidential proclamation
or an executive order, an administrative action, investigation
reports of Bureau of Lands investigators, and a legislative act
or statute. The applicant may also secure a certification from
the government that the lands applied for are alienable and
disposable. In Republic v. Tri-Plus Corp., 505 SCRA 41 (2006),
the Supreme Court held that applicants for confirmation of
imperfect title must prove the following:
1.
that the land forms part of the alienable and disposable agricultural lands of the public domain; and
2.
that they have been in open, continuous exclusive
and notarious possession and occupation of the same
under a bona fide claim of ownership either since
time immemorial or since June 12, 1945.
In Republic v. Southside Homeowners Assn., Inc. (502
SCRA 587 [2006]), the Supreme Court informed:
the President, upon the recommendation of the Secretary
of Environment and Natural Resouces, may designate by proclamation any tract/s of land of the public domain as reservations for the use of the Republic or any of its branches, or for
quasi-public uses or purposes.
In the same decision, the Court posited that ––
lands of the public domain classified as a military reservation remains as such until, by presidential fiat or congressional
act, the same is released from such classification, and declared
open to disposition. Art. XII, Sec. 3 of the 1987 Constitution
forbids private corporations from acquiring any kind of alienable land of the public domain, except thru lease for a limited
period.
PROVISIONS COMMON TO THE
THREE PRECEDING CHAPTERS
Art. 426. Whenever by provision of the law, or an individual declaration, the expression “immovable things or
property,” or “movable things or property,” is used, it shall
79
Art. 425
CIVIL CODE OF THE PHILIPPINES
be deemed to include, respectively, the things enumerated
in Chapter 1 and in Chapter 2.
Whenever the word “muebles,” or “furniture,” is used
alone, it shall not be deemed to include money, credits, commercial securities, stocks, and bonds, jewelry, scientific or
artistic collections, books, medals, arms, clothing, horses or
carriages and their accessories, grains, liquids and merchandise, or other things which do not have as their principal
object the furnishing or ornamenting of a building, except
where from the context of the law, or the individual declaration, the contrary clearly appears.
COMMENT:
(1) What the Expression ‘Immovable Things’ and ‘Movable
Things’ Include
The first paragraph of the Article explains itself.
(2) Use of the Word ‘Muebles’
This word is used synonymously with “furniture.” Note
that furniture has generally for its principal object the furnishing or ornamenting of a building. Found in the old Code, the use
of “muebles” was retained by the Code Commission, evidently
because many people are acquainted with its meaning. (See
1 Capistrano, Civil Code, p. 371). Note the enumerations of
things which are not included in the term “furniture.”
(3) Some Questions
(a)
A told B, “I’ll give you my furniture.’’ Does this include
books and bookcases?
ANS.: The books, no; the bookcases, yes. (Art. 426,
2nd par.).
(b)
A told B, “I’ll give you my furniture, including my stocks
and horses.” Are the stocks and horses included?
ANS.: Yes, in view of the express declaration to that
effect. (Art. 426).
80
CIVIL CODE OF THE PHILIPPINES
Title II. — OWNERSHIP
Chapter 1
OWNERSHIP IN GENERAL
Art. 427. Ownership may be exercised over things or
rights.
COMMENT:
(1) ‘Ownership’ Defined
Ownership is the independent and general right of a person to control a thing particularly in his possession, enjoyment,
disposition, and recovery, subject to no restrictions except those
imposed by the state or private persons, without prejudice to
the provisions of the law.
Philippine Suburban Development Corporation
v. The Auditor-General, Pedro M. Gimenez
L-19545, Apr. 18, 1975
FACTS: Petitioner Corporation sold to the Government a
parcel of land to be used by the latter in connection with the
relocation of squatters. The Government occupied the land at
once, although it had given only the down payment of its price,
the balance to be paid in the future after the seller shall have
first caused the registration of the property in its name. In the
meantime, is the seller (who has not been completely paid, but
who has already delivered the land) required to pay the real
estate taxes thereon?
HELD: No, the seller is not required to pay the real estate
taxes on the lot sold, because after all, it has already delivered
81
Art. 427
CIVIL CODE OF THE PHILIPPINES
the land to the Government. Ownership has therefore been
transferred to the government by virtue of said delivery. Be
it noted that generally, payment of the purchase price is not
essential to effectuate the transfer of ownership. Not being
the owner anymore, the Corporation had no duty to pay said
taxes. Since payment has already been made “under protest,” a
refund must be made in favor of the Corporation. Incidentally,
the fact that the condition regarding registration, has not yet
been complied with is of no significance, insofar as the payment
of said taxes is concerned.
Republic v. CA
208 SCRA 428
(1992)
Forest lands or forest reserves are not capable of private
appropriation, and possession thereof cannot ripen into private
ownership, unless such lands are classified and considered
disposable and alienable. Nonetheless, forest lands can be appropriated by private ownership.
PNB v. CA
84 SCAD 209
(1997)
Under Art. 428, the owner has the right to dispose of a
thing without other limitations than those established by law.
As an incident of ownership, therefore, there is nothing to
prevent a landowner form donating his naked title to the land.
However, the new owner must respect the rights of the tenant.
Sec. 7 of RA 3844, as amended (Code of Agrarian Reforms of the
Philippines) gives the agricultural lessee the right to work on
the landholding once the leasehold relationship is established.
[S]ecurity of tenure is a legal concession to agricultural lessees
which they value as life itself and deprivation of their landholdings is tantamount to deprivation of their only means of livelihood. Also, under Sec. 10 of the same Act, the law explicitly
provides that the leasehold relation is not extinguished by the
alienation or transfer of legal possession of the landholding.
82
CIVIL CODE OF THE PHILIPPINES
Art. 427
Marcos’ Alleged ‘Ill-gotten Wealth’
Republic of the Phils. v. Sandiganbayan
406 SCRA 190
(2003)
The Philippine Supreme Court adduced the following
points in adjudicating that the reported Swiss banks’ accounts
reportedly under the names of foreign foundations — and, thus,
rightfully belonging to the Philippine Government thus:
1.
the following facts must be established in order that forfeiture or seizure of this Swiss deposits may be effected:
a.
ownership by the public officer of money or property
acquired during his incumbency, whether it be in his
name or otherwise, and
b.
the extent to which the amount of that money or
property exceeds, i.e., is grossly disproportionate to,
the legitimate income of the public officer.
2.
respondent’s willingness to agree to an amicable settlement with the Republic of the Phils. only affirmed their
ownership of the Swiss deposits for the simple reason that
no persons would acquiesce to any concession over such
huge dollar deposits if he did not, in fact, own them;
3.
the reasons relied upon by the Supreme Court in declaring
the nullity of the agreements entered into by the Marcoses
with the Republic never in the least bit even touched on
the veracity and truthfulness of the Marcoses’ admission
with respect to their ownership of the Swiss funds; and
4.
inasmuch as the OWNERSHIP of the foreign foundations
in the assets was repudiated by Imelda Marcos, they could
no longer be considered as indispensable parties and their
participation in the proceedings became unnecessary.
(2) Kinds of Ownership
(a)
Full ownership (dominium or jus in re propia) — this
includes all the rights of an owner.
83
Art. 427
(b)
CIVIL CODE OF THE PHILIPPINES
Naked ownership (nuda proprietas) — this is ownership
where the right to the use and the fruits has been denied.
[NOTE: 1) Naked ownership plus usufruct equals full
ownership.
2) Usufruct equals full ownership minus naked
ownership.
3) Naked ownership equals full ownership minus usufruct.].
[NOTE: A usufructuary’s right may be called jus in
re aliena because he possesses a right over a thing owned
by another.].
(c)
Sole ownership — where the ownership is vested in only
one person.
(d)
Co-ownership (or Tenancy in Common) — when the ownership is vested in two or more owners. Manresa says:
“The concept of co-ownership is unity of the property,
and plurality of the subjects. Each co-owner, together
with the other co-owners, is the owner of the whole, and
at the same time, the owner of an undivided aliquot part
thereof.” (3 Manresa 368-387; Sison v. Fetalino, 47 O.G.
No. 1, 300).
(3) Where Questions of Ownership Should be Decided
Questions relating to ownership or even to the validity
or discharge of a mortgage should generally be ventilated in
an ordinary civil action or proceeding, and NOT under the
proceedings provided in the Land Registration Act, inasmuch
as the latter proceedings are summary in nature, and more
or less inadequate. (RFC v. Alto Surety and Ins. Co., L-14303,
Mar. 24, 1960). There are, of course, exceptions, as when both
parties concerned, are given full opportunity to present their
sides, and the court is able to obtain sufficient evidence to
guide the Land Registration Court in formulating its decision.
This, however, naturally falls within the sound discretion of
the Court. (Aglipay v. De los Reyes, L-12776, Mar. 23, 1960).
84
CIVIL CODE OF THE PHILIPPINES
Art. 428
(4) Possessory Information
Querubin v. Alconcel
L-23050, Sep. 18, 1975
An informacion possessoria (possessory information) duly
recorded in the Registry of Property is prima facie evidence
that the registered possessor is also the owner of the land
involved.
Art. 428. The owner has the right to enjoy and dispose
of a thing, without other limitations than those established
by law.
The owner has also a right of action against the holder
and possessor of the thing in order to recover it.
COMMENT:
(1) Rights of an Owner Under the Civil Code
Under Art. 428, the owner has:
(a)
the right to enjoy
(b)
the right to dispose
(c)
the right to recover or vindicate.
The right to enjoy includes:
(a)
the right to possess
(b)
the right to use
(c)
the right to the fruits.
The right to dispose includes:
(a)
the right to consume or destroy or abuse
(b)
the right to encumber or alienate.
(2) Rights of an Owner Under Roman Law
(a)
jus possidendi — the right to possess
(b)
jus utendi — the right to use
85
Art. 428
CIVIL CODE OF THE PHILIPPINES
(c)
jus fruendi — the right to the fruits
(d)
jus abutendi — the right to consume (and also to transform or abuse)
(e)
jus disponendi — the right to dispose
(f)
jus vindicandi — the right to recover.
Distilleria Washington, Inc. v.
La Tondeña Distillers, Inc.
87 SCAD 613
(1997)
The general rule on ownership must apply and petitioner
be allowed to enjoy all the rights of an owner in regard the
bottles in question, to wit: the jus utendi or the right to receive
from the thing what it produces; the jus abutendi or the right
to consume the thing by its use; the jus disponendi or the
power of the owner to alienate, encumber, transform and even
destroy the thing owned; and the jus vindicandi or the right
to exclude from the possession of the thing owned any other
person to whom the owner has not transmitted such thing.
What is proscribed is the use of the bottles in infringement of
another’s trademark or incorporeal rights.
(3) Example
If I am the owner of a house, I can:
(a)
live in it
(b)
use it
(c)
receive rentals from a tenant in case I lease it
(d)
destroy it
(e)
sell or mortgage or donate or alter it
(f)
recover it from anyone who has deprived me of its
rightful possession.
(4) Jus Possidendi
(a)
The right to possess means the right to hold a thing or
to enjoy a right. In either case, it means that the thing
86
CIVIL CODE OF THE PHILIPPINES
Art. 428
or right is subject to the control of my will. (Arts. 1495,
1496, 1497).
(b)
If I sell what I own, I am duty bound to transfer its possession, actually or constructively, to the buyer. (Arts.
1495, 1496, 1497).
(c)
If I buy a house from X, and X is renting it to Y, I can ask
Y to leave the premises so that I may possess the same
unless the lease is still unexpired and duly recorded in
the Registry of Property, or unless at the time of sale, I
already knew of the existence and duration of the lease.
The reason for the general rule is that the right to use the
house is one of the rights transferred as a consequence
of the change of ownership. (Art. 1676; see also Saul v.
Hawkins, 1 Phil. 275). The right I can exercise even if
there is an acute housing shortage and Y does not have
any place to go to, except of course if some law expressly
and directly prohibits me from doing so. (See Villanueva
v. Canlas, L-5229, Sep. 18, 1946).
(d)
If I lease my house to L, L has the right to physically possess my house for the duration of the lease as long as he
complies with the conditions of the contract, otherwise, if
I should eject him forcibly from the house, he may bring
an action of forcible entry against me, even if I am the
owner. (Masallo v. Cesar, 39 Phil. 134).
(5) Jus Utendi
The right to use includes the right to exclude any person,
as a rule, from the enjoyment and disposal thereof. For this
purpose, the owner-possessor may use such force as may be
reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of the property.
(Art. 429). Upon the other hand, the owner of a thing cannot
make use thereof in such manner as to injure the rights of a
third person. (Art. 431). Otherwise, he may be held liable for
damages, and if his property is a nuisance, it may even be destroyed. Also as a consequence of ownership, it has been held
that when a person using his brother’s land, with the latter’s
permission, is sued by a stranger who claims to be the owner
87
Art. 428
CIVIL CODE OF THE PHILIPPINES
thereof, the owner is entitled to intervene in the action so that
he can adequately protect his rights. If he be not allowed to
intervene, a judgment against the brother-possessor would generally not be binding on the brother-owner. (Mansa v. Judge,
et al., L-7830, Apr. 30, 1955).
(6) Jus Fruendi
The right to the fruits includes the right to three kinds
of fruits — natural, industrial and civil fruits (such as rents
from buildings). The right to natural fruits extends to the young
of animals. (Art. 441). It has been held that only owners, and
not mortgagees, can claim damages for injury to the fruits of
a piece of land and for injury caused by the deprivation of possession. The recovery of these damages is indeed an attribute
of ownership. (Calo v. Prov. Sheriff of Laguna, [CA] L-214-R,
Mar. 5, 1954).
(7) Jus Abutendi
In Roman law, jus abutendi did not really mean the right
to abuse, but the right to consume. However, modern terminology allows both meanings. A person can indeed burn his own
house if in an isolated place, but not where the burning would
endanger the properties of others. A person can dispose of his
wealth, but he must leave enough for his own support and for
those whom he is obliged to support. (Art. 750). If a person
wastes his money for the purpose of depriving his compulsory
heirs of their rightful legitime, he may be declared a spendthrift or prodigal. (Martinez v. Martinez, 1 Phil. 182).
(8) Jus Disponendi
The right to dispose includes the right to donate, to sell,
to pledge or mortgage. However, a seller need not be the owner
at the time of perfection of the contract of sale. It is sufficient
that he be the owner at the time of delivery. (Art. 1459). It is
essential in the contract of mortgage or pledge that the mortgagor or the pledgor be the owner of the thing mortgaged or
pledged, otherwise the contract is null and void. (Art. 2085;
see also Contreras v. China Banking Corp., [CA] GR 74, May
25, 1946). A mortgage, whether registered or not, is binding
88
CIVIL CODE OF THE PHILIPPINES
Art. 428
between the parties, registration being necessary only to make
the same valid as against third persons. (Samanillo v. Cajucom,
et al., L-13683, Mar. 28, 1960). A husband cannot ordinarily
donate property of considerable value to his wife as long as the
marriage lasts. Such a donation is considered null and void.
(Art. 133; Uy Coque v. Navas, 45 Phil. 430). The same rule is
applicable to a donation between a common-law husband and
a common-law wife, according to a decision promulgated by the
Court of Appeals.
(9) Jus Vindicandi
The right to recover is given expressly in Art. 428 which
provides that “the owner has also a right of action against
the holder and possessor of the thing in order to recover it.”
Moreover “every possessor has a right to be respected in his
possession; and should he be disturbed therein, he shall be
protected in or restored to said possession by the means established by the laws and the Rules of Court.” (Art. 539, par. 1).
Thus, jus vindicandi is transmissible to the heirs or assignees
of the person entitled to it. (See Waite v. Peterson, et al., 8 Phil.
449). If somebody actually possesses a piece of property, and
claims to be the owner thereof, the law raises a disputable
presumption of ownership. The true owner must then resort
to judicial process for the recovery of the property. (Art. 433).
In other words, the true owner must not take the law into his
own hands.
(10) Actions to Recover
(a)
Recovery of Personal Property
The proper action to recover personal property is
replevin, governed by Rule 60, Rules of Court.
(b)
Recovery of Real Property
There are three usual actions to recover the possession of real property:
1)
Forcible entry or unlawful detainer (either action was formerly referred to as accion interdictal).
89
Art. 428
CIVIL CODE OF THE PHILIPPINES
2)
Accion publiciana (or the plenary action to
recover the better right of possession).
3)
Accion reivindicatoria (or a reivindicatory
action). (Roman Catholic Bishop of Cebu v.
Mangaron, 6 Phil. 286; see also Emilia v. Bado,
L-23685, Apr. 25, 1968, 23 SCRA 183).
[ADDITIONALLY, we can also make use in certain
cases of the:
1)
writ of preliminary mandatory injunction;
and
2)
writ of possession.]
(11) Nota Bene
Oliveras, et al. v. Lopez, et al.
L-29727, Dec. 14, 1988
A “move in the premises” resolution is not a license to
occupy or enter the premises subject of litigation especially
in cases involving real property. A “move in the premises”
resolution simply means what is stated therein: the parties
are obliged to inform the Court of developments pertinent to
the case which may be of help to the Court in its immediate
disposition. In other words, this phrase must not be interpreted
in its literal sense.
Tabora v. Velio
L-60367, Sep. 30, 1982
In case of disputes involving real property, the proper
barangay court is where the property is situated, even if the
parties reside somewhere else in the same municipality or city.
If this is not followed, the Lupong Barangay (under PD 1508)
would have no jurisdiction.
(12) Replevin
(a)
Replevin is defined as an action or provisional remedy
where the complainant prays for the recovery of the pos90
CIVIL CODE OF THE PHILIPPINES
Art. 428
session of personal property. (Sec. 1, Rule 60, Rules of
Court).
[NOTE: Machinery and equipment used for an
industry and indispensable for the carrying on of such
industry, cannot be the subject of replevin, because under
the premises, they are real, and not personal property.
(Machinery and Engineering Supplies, Inc. v. Court of
Appeals, 96 Phil. 70).].
(b)
At the commencement of the action, or at any time before
the other party answers, the applicant may apply for an
order of the delivery of such property to him. (See Sec. 1,
Rule 60, Rules of Court).
(c)
When he applies for the order, he must show by his own
affidavit or that of some other person who personally
knows of the facts —
(d)
1)
that the applicant is the owner of the property
claimed, particularly describing it, or is entitled to
the possession thereof;
2)
that the property is wrongfully detained by the adverse party, alleging the cause of detention thereof
according to his best knowledge, information and
belief;
3)
that it has not been distrained or taken for a tax
assessment or fine pursuant to law or seized under
a writ of execution or preliminary attachment or
otherwise placed under custodia legis or if so seized,
that it is exempt from such seizure or custody; and
4)
the actual market value of the property. (Sec. 2, Rule
60, Rules of Court).
The applicant must also give a bond, executed to the adverse party in double the value of the property as stated in
the affidavit aforementioned, for the return of the property
to the adverse party if such return thereof be adjudged,
and for the payment to the adverse party of such sum as
he may recover from the applicant in the action. (Sec. 2,
Rule 60, Rules of Court).
91
Art. 428
CIVIL CODE OF THE PHILIPPINES
(e)
The court then orders the sheriff to take such property into
his custody. (See Sec. 3, Rule 60, Rules of Court). Under
the old law, it was the clerk of court who made the order.
(Sec. 263, Act 190).
(f)
If the property or any part thereof be concealed in a building or enclosure, and not delivered upon demand, the
sheriff must cause the building or enclosure to be broken
open. He then takes the property. (See Sec. 4, Rule 60,
Rules of Court).
Northern Motors, Inc. v. Herrera
L-32674, Feb. 22, 1973
FACTS: If a purchaser on the installment plan of
personal property, secured by a chattel mortgage, fails
to pay as stipulated in the contract, may the mortgagee
immediately sue for replevin to obtain possession of the
mortgaged property, or is it essential for him to first
foreclose on the mortgage?
HELD: The chattel mortgagee has the right to obtain immediate possession of the mortgaged chattel upon
breach of contract by the chattel mortgagors. If possession
is not transferred or delivered, replevin may be availed
of.
Stronghold Insurance Co., Inc. v. CA
208 SCRA 336
(1992)
Leisure’s Club, Inc.’s act of filing a replevin suit
without the intention of prosecuting the same, constitutes
a wanton, fraudulent, reckless, oppressive and malevolent
breach of contract which justifies the award of exemplary
damages under Art. 2232 of the Civil Code.
La Tondeña Distillers, Inc. v. CA
209 SCRA 544
(1992)
If a defendant in a replevin action wishes to have the
property taken by the sheriff restored to him, he should,
92
CIVIL CODE OF THE PHILIPPINES
Art. 428
within 5 days from such taking: (1) post a counterbond
in double the value of said property; and (2) serve plaintiff with a copy thereof — both requirements, as well as
compliance therewith within the 5-day period mentioned,
being mandatory.
The remedy of a stranger to the action for replevin
is a third-party claim under Sec. 7, Rule 60 of the Rules
of Court. To avail of the remedy of intervention, prior
determination of whether one is a proper party defendant
or a stranger to the action is necessary.
Arabesque Industrial Phils. v. CA
216 SCRA 602
(1992)
A writ of replevin cannot be directed against the
lawful possessor.
Chua v. CA
41 SCAD 298
(1993)
Replevin will not lie for property in custodia legis.
Navarro v. CA
41 SCAD 859
(1993)
As to the properties sought to be removed, the court
sustains the possession by plaintiff of all equipment and
chattels recovered by virtue of a writ of replevin.
Sebastian v. Valina
43 SCAD 71
(1993)
Under the Rules of Court, the property seized under
a writ of replevin is not to be delivered immediately to the
plaintiff.
93
Art. 428
CIVIL CODE OF THE PHILIPPINES
Tan v. CA
46 SCAD 435
(1993)
Although a replevin action is primarily one for
possession of personalty, yet it is sufficiently flexible to
authorize a settlement of all equities between the parties,
arising from or growing out of the main controversy.
Filinvest Credit Corp. v. CA
64 SCAD 598
(1995)
A party is held liable for damages not because it
commenced an action for replevin to recover possession of
a truck prior to its foreclosure but because of the manner
it carried out the seizure of the vehicle, using its own employees who misrepresented themselves as deputy sheriffs
to seize the truck without having been authorized by the
court to do so.
For employing subterfuge in seizing the truck by
misrepresenting its employees as deputy sheriffs, and
then hiding and cannibalizing it, the petitioners committed bad faith in violation of Art. 19 of the Civil Code.
Citibank, N.A. v. CA
104 SCAD 614, 304 SCRA 679
There is substantial compliance with the rule requiring that an affidavit of merit to support the complaint for
replevin if the complaint itself contains a statement of
every fact required to be stated in the affidavit of merit
and the complaint is verified like an affidavit.
Elisco Tool Manufacturing
Corp. v. CA
307 SCRA 731
The condition that the lessor has deprived the lessee
of possession or enjoyment of the thing for the purpose
of applying Art. 1485 of the Civil Code was fulfilled in
94
CIVIL CODE OF THE PHILIPPINES
Art. 428
this case by the filing by petitioners of the complaint for
replevin to recover possession of movable property.
Fernandez v. International Corporate Bank
316 SCRA 326
A writ of replevin may be served anywhere in the
Philippines.
Movers-Baseco Integrated Port
Services, Inc. v. Cyborg Leasing Corp.
317 SCRA 327
Actual damages in the form of unpaid rentals are
not mere incident of the action for the return of a forklift
where the plaintiff specifically sought in the complaint not
only the seizure of the forklift but likewise the payment
of unpaid and outstanding rentals.
Servicewide Specialists, Inc. v. CA
318 SCRA 493
An adverse possessor, who is not the mortgagor cannot
just be deprived of his possession, let alone be bound by the
terms of the chattel mortgage contract, simply because the
mortgagee brings up an action for replevin.
Factoran, Jr. v. CA
320 SCRA 530
When a thing is in official custody of a judicial or
executive officer in pursuance of his execution of a legal
writ, replevin will not lie to recover it.
Property Already Placed Under Legal Custody May Not
be a Proper Subject of Replevin
Basic is this rule; moreso, the time periods set by law,
and which are not to be treated lightly. In this respect, a judge
cannot defer action indefinitely on a preliminary investigation
pending in his action. (Vda. de Danao v. Ginete, 395 SCRA 542
[2003]).
95
Art. 428
CIVIL CODE OF THE PHILIPPINES
(13) Forcible Entry (Detentacion)
(a)
Definition
Forcible entry is a summary action to recover material or physical possession of real property when a person
originally in possession was deprived thereof by force,
intimidation, strategy, threat, or stealth. (Keyword is
FISTS). (See Rule 70, Sec. 1, Rules of Court).
(b)
Prescriptive Period
The action must be brought within one year from
the dispossession. However, in case of strategy or stealth,
it would seem that the better rule would be to count the
period of one year from the time of DISCOVERY of such
strategy or stealth.
(c)
Issue Involved
The issue involved is mere physical possession (possession de facto) and not juridical possession (possession
de jure) nor ownership. (See Maddammu v. Court, 74 Phil.
230; Mercado v. Go Bio, 78 Phil. 279; Masallo v. Cesar, 39
Phil. 134).
(d)
Cases
Masallo v. Cesar
39 Phil. 134
If an owner deprives a person lawfully entitled to
possession (such as, for example, a tenant who has complied with all his obligations) thru FISTS, said tenant may
bring an action of forcible entry even as against the owner.
This is because the owner in the example presented had
surrendered material possession to the tenant by virtue
of the lease contract. The fact that he is the owner is immaterial.
Monteblanco v. Hinigaran Sugar
Plantation and Coruna
63 Phil. 794
The law insists that an action for forcible entry must
be filed within one year because public interest is involved,
96
CIVIL CODE OF THE PHILIPPINES
Art. 428
and therefore the case must be tried and decided as soon
as possible.
Supia and Batioco v. Quintero and Ayala
59 Phil. 312
Purpose of forcible entry — “The purpose is that,
regardless of the actual condition of the title to property,
the party, in peaceable and quiet possession shall not be
turned out by strong hand, violence, or terror … In affording this remedy, breaches of the peace and criminal
disorder would be minimized. A party out of possession
must respect and resort to the law alone to obtain what
he claims is his.’’
Gumiran v. Gumiran
21 Phil. 174
Facts to be stated in the complaint for forcible entry
— The complaint must allege that one in physical possession of a land or building has been deprived of said
possession by another thru:
a)
b)
c)
d)
e)
force, or
intimidation, or
threat, or
strategy, or
stealth.
Sps. Benitez v. CA
77 SCAD 793
(1997)
In forcible entry, the plaintiff is derived of physical possession of his land or building by means of force,
intimidation, threat, strategy or stealth. Thus, he must
allege and prove prior possession.
[NOTE: If the forcible entry was not accomplished
thru any of the above-mentioned means, “forcible entry is
not the proper action.’’ (Gumiran v. Gumiran, supra).].
[NOTE: It is not essential to set forth in the complaint for forcible entry the exact language of the law. It
97
Art. 428
CIVIL CODE OF THE PHILIPPINES
is sufficient if stated substantially, or if facts are alleged
showing that the dispossession took place thru any of the
means set up by the law. (Gumiran v. Gumiran, supra).].
[NOTE: A, in a complaint for forcible entry stated
in the complaint that he had been “deprived” of the land
he owned. Is this sufficient?
HELD: No, this is not sufficient for he did not state
in what way he had been deprived. (Gumiran v. Gumiran,
supra).].
[NOTE: A, in a complaint for forcible entry stated in
the complaint that the defendant had “unlawfully turned
the plaintiff out of the possession” of land or building. Is
this sufficient?
HELD: Yes, this is sufficient. It is true that prior
physical possession must be alleged. But this can be
implied from the fact that the complaint states that the
plaintiff had unlawfully been deprived of his possession.
(Co Tiamco v. Diaz, et al., 42 O.G. 1169; Maddammu v.
Court, 74 Phil. 230).].
[NOTE: Is it essential in the complaint for forcible
entry or detainer to state that the action is being brought
within the one-year period or is it sufficient to just prove
this in court without the necessity of alleging the same
in the complaint?
HELD: This fact need not be alleged in the complaint, but must be proved during the trial. (Co Tiamco
v. Diaz, et al., 42 O.G. 1169).].
City of Manila v. Gerardo Garcia, et al.
L-26053, Feb. 21, 1967
FACTS: The City of Manila is the owner of parcels
of land forming one area in Malate, Manila. Shortly after
liberation, several persons entered upon these premises
without the City’s knowledge and consent, built houses
of second class materials, and continued to live there till
action was instituted against them. In 1947, the presence
of the squatters having been discovered, they were then
98
CIVIL CODE OF THE PHILIPPINES
Art. 428
given by then Mayor Valeriano Fugoso written permits
each labelled a “lease contract.” For their occupancy, they
were charged nominal rentals. In 1961, the premises were
needed by the City to expand the Epifanio de los Santos
Elementary School. When after due notice the squatters
refused to vacate, this suit was instituted to recover possession. Defense was that they were “tenants.”
HELD: They are squatters, not tenants. The mayor
cannot legalize forcible entry into public property by the
simple expedient of giving permits, or for that matter,
executing leases. Squatting is unlawful and the grant of
the permits fosters moral decadence. The houses are public
nuisances per se and they can be summarily abated, even
without the aid of the courts. The squatters can therefore
be ousted.
Villaluz v. CA
210 SCRA 540
(1992)
One in possession of public land may file an action
for forcible entry.
Sen Po Ek Marketing Corp. v. CA
212 SCRA 154
(1992)
While the pendency of a suit for declaration of the
inefficiency of a deed of sale does not constitute a compelling reason to delay the termination of an ejectment case,
a judgment of annulment may be a ground for ordering
the reconveyance of the disputed property to the original
lessees.
Allegation of Ownership by Defendant in Forcible
Entry Cases
Ganadin v. Ramos
L-23547, Sep. 11, 1980
If what is prayed for is ejectment or recovery of
possession, it does not matter if ownership is claimed by
99
Art. 428
CIVIL CODE OF THE PHILIPPINES
either party. The municipal court will still have jurisdiction.
Aquino v. Deala
63 Phil. 582
Under the law, justice of the peace courts and municipal judges have jurisdiction over cases involving forcible
entry and unlawful detainer but have no jurisdiction to
pronounce judgments regarding ownership. Now then, A
brings an action of forcible entry against B in the justice
of the peace court. B, however, alleges his ownership over
the property in question. Does B’s allegation deprive the
court of its jurisdiction?
HELD: No, otherwise the jurisdiction of a court can
be changed by the mere allegation by the defendant, and
the ends of justice would be easily frustrated. Of course,
if the question of ownership really becomes essential in
determining the question of possession, the justice of the
peace court would no longer have jurisdiction, for the issue has changed. Thus, the Supreme Court has said, “if
in the course of the hearing and in the presentation of
evidence it is found that the question of possession cannot be resolved without first determining the title to the
property, its jurisdiction is lost, and the case should be
dismissed.’’ (Torres v. Peña, 4 O.G. 8, p. 2699; Peñalosa
v. Garcia, 44 O.G. 8, 2709, decided Apr. 1, 1947).
[NOTE: The amendment to the Judiciary Act, already referred to with respect to city courts (not municipal
courts) and CFI’s having concurrent jurisdiction in cases
where possession cannot be determined unless the issue
of ownership is also resolved.].
[NOTE: If a court without jurisdiction decides a
case, the judgment is completely null and void, and may
be attacked at any time, directly or collaterally. This is
true even if no appeal has been made. Indeed, there would
be no res judicata on the issue of ownership. (Mediran v.
Villanueva, 37 Phil. 752).].
[NOTE: The Rules of Court provides: “The judgment
rendered in an action for forcible entry or detainer shall be
100
CIVIL CODE OF THE PHILIPPINES
Art. 428
conclusive with respect to the possession only, and shall
in no wise bind the title or affect ownership of the land or
building. Such judgment shall not bar an action between
the same parties respecting title to the land or building.’’
(Sec. 18, Rule 70, Rules of Court).].
Patricio S. Cunanan v.
Court of Appeals and Basaran
L-25511, Sep. 28, 1968
FACTS: In a forcible entry case, a judgment by compromise was given stating that according to the terms of
the compromise, each party admitted the ownership and
possession by the other, of half of the land. Issue: What is
the effect of the pronouncement of this “ownership”?
HELD: The judicial pronouncement did not amount
to an adjudication of the title of the land involved. The
ownership thereof was mentioned in said agreement
merely as a BASIS for the right of possession therein
acknowledged by both parties. Such right of possession
was the only question sought to be settled and actually
decided therefore by the inferior court.
[NOTE: Incidentally in the above case, defendant
was a Muslim. The compromise agreement was attacked
as void under Secs. 145 and 146 of the Administrative
Code of Mindanao and Sulu on the ground that the same
did not have the approval of the Provincial Governor or
his duly authorized representative. The court held that
such approval is needed only in ordinary contracts, not
in agreements for the settlement of judicial proceedings,
approved by the court before which the same are pending.
The approval by the governor or his representative cannot be given greater weight than that given by a court of
justice — a court which can properly hear both sides.].
Pabico v. Ong Pauco
43 Phil. 572
FACTS: Land owned by A was sold at public auction.
Now under the law, the owner is entitled to redeem said
101
Art. 428
CIVIL CODE OF THE PHILIPPINES
property within a period of one year. Before the expiration of said period, the sheriff put the purchaser forcibly
in possession of the land. May A file an action of forcible
entry against both the sheriff and the purchaser?
HELD: Yes, because here, the sheriff and the purchaser had no right to eject A since the period of redemption had not yet expired.
Ines Sapong Caseñas, et al. v.
Ricardo Jandayan
L-17593, May 24, 1962
FACTS: In June, 1959, the defendant forcibly entered
a portion of a two-hectare land of the plaintiffs. The latter sued for forcible entry. Later, defendant threatened to
usurp another portion of the same land. Then plaintiffs
sued for INJUNCTION to prevent this new deprivation.
HELD: The remedy is not a separate action in connection with the original case of forcible entry. (See Sec. 3
[now Sec. 15], of Rule 70 of the Rules of Court). To permit
the separate suit for injunction would militate against the
rule prohibiting multiplicity of suits.
Saturnino A. Tanhueco v.
Hon. Andres Aguilar, et al.
L-30369, May 29, 1970
FACTS: During the pendency of an ejectment case,
the defendant DIED, and his heirs vacated the property.
Issue: Can the recovery of the damages proceed despite
the death and the leaving of the premises or should the
claim now be instituted in the estate proceedings of the
deceased?
HELD: The claim for damages here can continue. In
a case of ejectment or unlawful detainer, the main issue is
possession of the property, to which the right to damages
for the withholding of possession is merely INCIDENTAL.
The case must continue until final judgment.
102
CIVIL CODE OF THE PHILIPPINES
Art. 428
(14) Unlawful Detainer (Desahucio)
(a)
Definition
Unlawful detainer is the action that must be brought
when possession by a landlord, vendor, vendee or other
person of any land or building is being unlawfully withheld after the expiration or termination of the right to
hold possession, by virtue of any contract, express or
implied. In such a case, prior physical possession IS NOT
required. (Sps. Benitez v. CA, 77 SCAD 793 [1997]). It is,
however, not the proper remedy if the purpose is not to
recover possession but to exact specific performance of
a contract. (Municipality of Batangas v. Santos, et al.,
L-4012, June 30, 1952).
[NOTE: To make out a case of unlawful detainer, the
complaint must show that the withholding of possession,
or the refusal to vacate, is UNLAWFUL. Thus, where the
complaint shows prior possession by the defendant, but
does NOT allege that the right of possession had terminated, and that occupancy was being unlawfully withheld
from the plaintiff, there is NO case of unlawful detainer.
However, the precise terminology of the law does not
necessarily have to be employed. (Valderrama Lumber
Manufacturers’ Co. v. L.S. Sarmiento Co., L-18535, May
30, 1962).].
[NOTE: A person or squatter who occupies the land
of another at the latter’s tolerance or permission, without
any contract between them, is necessarily bound by an
implied promise that he will vacate upon demand, failing
which, a summary action for ejectment or unlawful detainer is the proper remedy against him. (Yu v. De Lara,
et al., L-16084, Nov. 30, 1962).].
Pharma Industries, Inc. v. Pajarillaga
L-53788, Oct. 17, 1980
S sold a lot to B a retro. S failed to redeem within
the stipulated period of repurchase, and B was able to
consolidate his ownership over the property. However, despite demand on S, he failed to surrender the land. What
103
Art. 428
CIVIL CODE OF THE PHILIPPINES
is B’s remedy? An action for unlawful detainer because of
the withholding of possession.
Villamin v. Echiverri
L-44377, Dec. 15, 1982
If there is no legal ground for ejectment of a tenant
of an apartment, the suit cannot prosper. Under PD 20,
increase of rent is not allowed if the monthly rental is
P300 or less.
Ganadin v. Ramos
L-23547, Sep. 11, 1980
If in an unlawful detainer case the lessor wins, he
is entitled to the fair market value of the property.
Cañiza v. CA
79 SCAD 863
(1997)
In an action for unlawful detainer, it suffices to allege
that the defendant is unlawfully withholding possession
from the plaintiff and a complaint for unlawful detainer
is sufficient if it alleges that the withholding of possession
or the refusal to vacate is unlawful without necessarily
employing the terminology of the law.
Chua v. CA
81 SCAD 907
(1997)
Public policy dictates that unlawful detainer cases
be resolved with the least possible delay and judgments
in favor of plaintiff are executed immediately. Sole issue
in an action for unlawful detainer is physical OR material
possession.
The pendency of an action for quieting of title before
the RTC does not divest the city or municipal trial court of
its jurisdiction to proceed with the ejectment case over the
same property. The subsequent acquisition of ownership
by any person is not a supervening event that will bar the
execution of the judgment in the unlawful detainer case.
104
CIVIL CODE OF THE PHILIPPINES
Art. 428
Lao v. CA
84 SCAD 341
(1997)
Although an action for unlawful detainer is inadequate for the ventilation of issues involving title or
ownership of controverted real property, it is more in
keeping with procedural due process that where issues
of title or ownership are raised in the summary proceedings for unlawful detainer, said proceeding should be
DISMISSED FOR LACK OF JURISDICTION, unless, in
the case of an appeal from the inferior court to the Court
of First Instance (CFI) (now Regional Trial Court [RTC]),
the parties agree to the latter court hearing the case in
its jurisdiction in accordance with Rule 40, Sec. 11 of the
Rules of Court.
Villaluz v. CA
86 SCAD 589
(1997)
Anent the ejectment case, the 1-year reglementary
period under Rule 70, Sec. 1 of the Rules of Court for filing
an unlawful detainer case is counted from the time of the
“unlawful deprivation or withholding of possession.’’ Such
unlawful deprivation occurs upon expiration or termination of the right to hold possession. And such right legally
expires or terminates upon receipt of the last demand to
vacate.
Nueva Vizcaya Chamber of Commerce
v. Court of Appeals
L-49059, May 29, 1980
It is the nature of the suit alleged in an ejectment
complaint that will determine if an inferior court has
jurisdiction over the same. Now then, if an ejectment
case is decided by the CFI (now RTC) in the exercise of
its original (not appellate) jurisdiction, the parties are
estopped to question the jurisdiction of the court. Ordinarily however, jurisdiction over the subject matter cannot
be waived, and the lack of jurisdiction may be raised any
time.
105
Art. 428
CIVIL CODE OF THE PHILIPPINES
Buenavente v. Melchor
L-33145, Mar. 30, 1979
A “squatter’’ is one who settles on the land of another
without any lawful authority. The term is particularly
applied to a person who settles on “public land.’’ But even
if the land is private, the unlawful settler may still be
regarded as a squatter.
[NOTE: If before the ejectment case is filed, the defendant had previously filed an action against the plaintiff
to annul the sale of the land, the ejectment suit should be
held in abeyance until after the question of title is decided.
(Maristela, et al. v. Pastor Reyes and Valero, L-11537, Oct.
31, 1958).].
Where the consideration has been paid for the purchase of land, but the sale has not been actually completed
due to the inability of the vendor to furnish title deeds,
an action for ejectment will not lie, the remedy in such
cases being fulfillment of the contract (specific performance), or for damages if fulfillment be impossible. But if
the complaint is for possession and a declaration of ownership, plaintiff is entitled to a judgment for possession,
even though he fails to establish his right of ownership.
(Siojo v. Diaz, 5 Phil. 614).
People v. Echavez
L-47757-61, Jan. 28, 1980
Squatting in an urban community is penalized under
PD 722. This decree does not apply to squatting in pasture
lands.
[NOTA BENE: It is RA 947 that punishes squatting
on public agricultural lands; squatting has now been decriminalized.].
Central Bank v. Bichara
GR 131074, Mar. 27, 2000
FACTS: The deed of sale provided, among other
things, that the sellers “shall convey the property free
106
CIVIL CODE OF THE PHILIPPINES
Art. 428
from all liens and encumbrances.’’ The buyers delayed
the payment of the purchase price due to the presence of
squatters who were not evicted by the sellers.
Moreover, the deed of sale contains a clause saying
the seller shall pay the capital gains tax, documentary
stamps tax, and other transfer fees. The seller failed to
pay the said taxes and fees.
ISSUES: (1) Was the delay in payment justified;
and
(2) May the buyer retain the purchase price in view
of this failure?
HELD: On the first issue, the answer is no. The
squatters’ illegal occupation cannot be deemed a lien or
encumbrance. By the express terms of Art. 1590 of the
Civil Code, a mere act of trespass will not authorize the
suspension of payment of the price.
On the second issue, the answer is again no. The
clause is a standard one in most contracts of sale and is
nothing more than a specification as to which party shall
bear such fees and taxes.
(b)
Prescriptive Period
The action must be brought within one year from
the time possession becomes unlawful, thus —
1)
if there is a fixed period for the termination of
the lease, the lease ends automatically without
need of any demand; hence, the one-year period
begins from the expiration of the lease.
2)
if the reason for ejectment is non-payment of
rent or the non-fulfillment of the conditions of
the lease, then the one-year period must be
counted from the date of demand to vacate.
(Thus, if the demand to vacate comes only 3 years
from the time tenant had begun not to pay the rents, the
landlord still has a period of one year to be counted from
the date of such demand.)
107
Art. 428
CIVIL CODE OF THE PHILIPPINES
[NOTE: The demand to vacate must be absolute, not
conditional. Moreover, the complaint must state WHEN
the demand was made, and the fact that such demand
had been served personally, or by serving written notice,
or by posting such notice. (Gallarde v. Moran, L-19572,
July 30, 1965). The demand must be made at least 5 days
(building) or 15 days (land) before the action is brought.
(Ibid., citing Sec. 2, Rule 70, Rules of Court).].
[NOTE: If several demands had been made, the period of one year must be counted 5 days or 15 days as the
case may be from the time of the LATEST demand, unless
in the meantime an accion publiciana has been brought.
(Calubayan v. Pascual, L-22645, Sep. 18, 1967).].
Bormaheco, Inc. v. Abanes
L-28087, July 13, 1973
ISSUES:
1)
If a squatter is sought to be ejected, from what time
should we compute his unlawful possession of the
premises?
2)
If an ejectment suit is dismissed on a certain ground,
may another ejectment suit prosper, this time, based
on other grounds?
HELD:
1)
A squatter’s possession is by tolerance. This kind
of possession becomes unlawful from the time the
owner makes a demand on the squatter to vacate
the premises.
2)
Yes, the latter ejectment case, based as it is, on
another ground, may prosper.
[NOTE: From the time the lessee begins paying
monthly rentals LESS than the stipulated amount,
he is in DEFAULT, and can be considered as illegally
possessing the property, where despite demands he
refuses to pay or to vacate the property. (Uichanco
v. Laurilla, L-13935, June 30, 1960; Richards v.
Gonzales, L-14939, Sep. 26, 1960).].
108
CIVIL CODE OF THE PHILIPPINES
(c)
Art. 428
Issue
The issue is possession de facto (material possession),
not possession de jure nor ownership. (See Reyes v. Villaflor,
et al., L-15755, May 30, 1961, where the Court held that if
a lease contract expires and the lessee refuses to vacate, a
case of unlawful or illegal detainer is present).
[NOTE: If the defendants in a case are evidently possessors and sales applicants in good faith of public land,
and the case does not involve the failure of a tenant to
pay rent, the action is one involving the right of ownership and possession, and is not one of unlawful detainer.
(Garcia v. Muñoz, L-11613, 1958).].
Tiu v. Court of Appeals
L-32626, Jan. 28, 1971
FACTS: Tenant persists in remaining on the premises,
alleging that lessor is not the owner, and is not a Filipino citizen. He, however, admits the existence of the lease contract,
and its expiration. Issue: Has tenant a proper defense?
HELD: No, because ownership is not the issue involved
in an unlawful detainer or ejectment case. His appeal to the
Supreme Court on the grounds stated may even be considered
frivolous and made solely for delay.
Cantillana v. Vda. de Scott
L-39450, Aug. 29, 1950
If an adverse judgment concerning land registration or
any ordinary case is rendered against a person, the buyers or
successors-in-interest from said person are likewise bound by
said judgment.
Tayag, et al. v. Yuseco, et al.
L-8139, Oct. 24, 1955
FACTS: An attorney leased the land of X but because of
the attorney’s legal services to X, X made him understand that
109
Art. 428
CIVIL CODE OF THE PHILIPPINES
he need not pay rents, and that the attorney could use the land
gratis as long as she (X) lives. So, the attorney constructed a
very big house on the land thinking he had a right to do so in
view of the intended donation. Just before X died, she sold it to
her daughter Y, who thenceforth demanded rent from the attorney from the very beginning. When the attorney did not pay,
Y brought this action for unlawful detainer.
ISSUES:
1)
Was the intended donation really a donation?
HELD: No, since the formalities of a donation
(public instrument, etc.) had not been complied
with.
2)
Should the attorney pay rent?
HELD: Yes, but only from the time X sold the
property to Y, because insofar as X was concerned,
the lease was gratuitous, i.e., rent payment had been
waived or remitted.
3)
Is the attorney a builder in good faith of the
house?
HELD: Yes, since he thought (even though
erroneously) that the land was already his by donation.
4)
In an action for unlawful detainer, can the trial
court pass upon the rights of the tenant regarding
the house built during the existence of the lease?
HELD: In ordinary ejectment (forcible entry
or unlawful detainer) cases, where the lessee or occupant has not built anything on the premises, the
only judgment that may be rendered therein, under
Rule 72, Sec. 7 (now Rule 70, Sec. 6, Rules of Court),
is for the defendant (lessee) to recover costs, in the
event the complaint is not true; or if the court finds
the complaint to be true, to render judgment for the
plaintiff for the restitution of the premises, for the
payment of reasonable rent, and for costs. However,
where the lessee has constructed a substantial and
110
CIVIL CODE OF THE PHILIPPINES
Art. 428
valuable building on the land, the courts are bound
to take cognizance of said fact, and when they find
that the construction had been effected in good faith,
the courts instead of dismissing the complaint, may
apply the provisions of the Civil Code relative to
builders, especially if the ownership of the land and
building is not disputed (and where, therefore, questions of title would not be in issue).
5)
Should the action for unlawful detainer prosper?
HELD: Yes, for non-payment of rental, without
prejudice to the determination of the right of each,
particularly regarding the building.
(d)
Cases
Marciano Songahid v. Benito Cinco
L-14341, Jan. 29, 1960
FACTS: The Bishop of Zamboanga brought an action
for unlawful detainer against Marciano Songahid, alleging
non-payment of rent. Songahid pleaded ownership over
the land, stating that he had asserted an adverse interest over the property long ago. Incidentally, the Bishop
alleged rightful possession by virtue of a lease application
with the Bureau of Lands. Songahid on the other hand
claims ownership by virtue of a homestead application
long pending action. Issue: Does the Justice of the Peace
Court (now referred to as municipal trial court) have
jurisdiction over the unlawful detainer case?
HELD: No jurisdiction, because here, the issue of
possession is directly interwoven with the claim of ownership. The recourse of the parties is with the Bureau of
Lands which under the law (Com. Act 141) is charged with
the disposition and alienation of disposable portions of the
public domain to qualified applicants. This administrative
remedy must first be exhausted before the powers of the
Court may be invoked.
[NOTE: A violation by a party of any of the
stipulations of a contract or agreement to sell real
111
Art. 428
CIVIL CODE OF THE PHILIPPINES
property would entitle the other party to resolve or
to rescind it. An allegation of such violation in a
detainer suit may be proved, but the justice of the
peace court cannot declare the contract resolved or
rescinded. It is beyond its power to do so. Indeed, a
stipulation entitling one party to take possession of
the land and building, if the other party violates the
contract, does NOT ex proprio vigore (of its own force)
confer upon the former the right to take possession
thereof, if objected to, without judicial intervention
and determination. (Nera v. Vacante, L-15725, Nov.
29, 1961).].
Cesario M. Clemente v. Court of Appeals, et al.
L-18686, Jan. 24, 1967
FACTS: Lourdes Puigcerver owned a residential
house built on a piece of public land in Masbate. On Sept.
1, 1950, she leased the house to Cesario M. Clemente. On
Mar. 3, 1951, Puigcerver sold conditionally to Clemente
both the house and whatever rights she had over the land
— for the sum of P7,800. A down payment of P2,800 was
supposed to be given; the balance would be due as soon as
Clemente’s application with the Government for the sale
of the land to him was approved. It was further agreed
that should the government sale be disapproved, the sale
would be converted to a mere lease retroactive to the date
of perfection. Rentals would then be charged against the
down payment. Instead of paying the down payment of
P2,800, Clemente was able to pay only P1,000. On Dec.
10, 1951, Clemente’s application with the Bureau of Lands
was disapproved. As a result, Puigcerver demanded rentals. After the P1,000 down payment had been applied to
the rents, Clemente refused to pay further rents. Instead,
he asked for a reconsideration of the government’s disapproval of the sale. Reconsideration was denied. In view
of Clemente’s refusal to pay rent, Puigcerver sued him in
the Justice of the Peace Court (now municipal trial court),
for recovery of possession of the premises. In his answer,
Clemente alleged that since the execution of the contract
of conditional sale, he had been occupying the house in
112
CIVIL CODE OF THE PHILIPPINES
Art. 428
question as absolute owner; and that consequently, the
Justice of the Peace Court had no jurisdiction, the question of ownership being necessarily and indispensably
involved therein. Issue: Does said inferior court have
jurisdiction?
HELD: Yes. Upon the pleadings filed, the only
question before said court was the recovery of physical
possession of the land and house, subject matter of the
conditional sale. The mere fact that in his answer, Clemente alleged that he considered himself as the exclusive
owner of the aforementioned house by virtue of the contract of sale — did not deprive the court of jurisdiction
to try the ejectment case. The sale being conditional, it
became ineffective in accordance with its own terms, upon
the disapproval of Clemente’s sales application.
(e)
To What Lands Applicable
The action can apply to all kinds of land, whether
agricultural, residential, or mineral, since the law does
not distinguish. (Teodoro v. Sabala, et al., L-11522, Jan.
31, 1958).
(f)
Distinguished from Forcible Entry
In forcible entry, the possession was unlawful from
the very beginning; in unlawful detainer, the possession
was lawful in the beginning, but became unlawful afterwards (as in the case where a lease contract has already
expired). In both, however, ownership is not involved, but
only the right to the material possession of the premises.
Evidence showing ownership may indeed be given, not
for the purpose of proving ownership, but merely to show
proof that material possession had been lost. (Baguiro v.
Barrios, GR L-277, 43 O.G. 2031). Also, both are proceedings in personam (binding only on the parties, and privies)
and not proceedings or actions in rem (binding upon the
whole world). (See Vda. de Sengbengco, et al. v. Arellano,
et al., L-16269, Mar. 8, 1961). However, since they involve
real property, they are also termed “actions quasi in rem’’
which are really actions in personam, involving real property.
113
Art. 428
CIVIL CODE OF THE PHILIPPINES
De Guzman v. CA
82 SCAD 152
(1997)
Forcible entry and unlawful detainer are QUIETING PROCESSES and the 1-year time bar to the suit is
in pursuance of the summary nature of the action. The
1-year period is counted from the time the entry by stealth
was made by the defendant. After the lapse of the 1-year
period, the remedy of the party disposed of a land is to
file an accion publiciana.
Villanueva v. Mosqueda
GR 58287, Aug. 19, 1982
The venue of ejectment cases may be agreed upon
by the parties, for the same is not jurisdictional in character.
(g)
Cases
Pharma Industries, Inc. v. Hon. Pajarillaga
L-53788, Oct. 17, 1980
1)
In forcible entry, defendant’s possession is illegal
ab initio; in unlawful detainer, his possession was
originally lawful.
2)
In forcible entry, prior possession of plaintiff is essential; in unlawful detainer (as when vendor a retro
fails to deliver the property to vendee a retro despite
failure of the former to repurchase the same and
after title had been consolidated in the latter) said
prior possession is not always essential or a condition
sine qua non.
Cruz, et al. v. Roxas, et al.
L-160, 42 O.G. No. 3, p. 458
FACTS: A, the owner of a house was renting the
same to B, who was occupying said house. B had a guest,
C, who was staying at the house. A brought an action
114
CIVIL CODE OF THE PHILIPPINES
Art. 428
of unlawful detainer against B, who was not paying his
rentals. A won, and B was ejected. C however, wanted to
remain on the premises, alleging that the action had been
brought only against B, not against both B and C. Is C
correct in alleging that he should not be ejected?
HELD: No. C is not correct. Guests, friends, and
relatives (staying on the premises) are privies to an action against the tenant (from whom their right to stay is
derived), and are therefore not entitled to separate independent legal process of ejectment. Once B was ordered
to go away, this meant that C (the guest of B) should also
go away. It is wrong to say that C has been deprived of
the constitutional protection of due process of law.
Ariem v. De los Angeles
L-32164, Jan. 31, 1973
ISSUE: If a person by final judgment is ejected
from a building, can his parent-in-law (who also occupies
the building, but who claims to be the owner thereof) be
ejected also even if he claims he was never made a defendant in the ejectment case?
HELD: Yes, said parent-in-law can be ejected. After
all, it is presumed that he was notified by his son-in-law
of the suit for ejectment against the latter.
Torres v. Peña
44 O.G. No. 8, p. 2699
A filed an action for unlawful detainer against B.
B alleged that the property had been sold to him by A.
A answered back that the supposed sale was fictitious
and fraudulent. No circumstances showed that the claim
was unfounded. Can the Justice of the Peace decide the
case?
HELD: The Justice of the Peace Court has no jurisdiction here because the question of possession cannot be determined without first deciding the question of ownership.
(See also Peñalosa v. Garcia, 44 O.G. No. 8, p. 2709).
115
Art. 428
CIVIL CODE OF THE PHILIPPINES
Quimson v. Suarez
45 Phil. 101
A new tenant entitled to possess may bring, in lieu
of the landlord, an action of unlawful detainer against the
old tenant whose right to possess has already expired.
Supia, et al. v. Quintero, et al.
59 Phil. 312
FACTS: A sold his land to B in a pacto de retro transaction, but he (A) continued in possession thereof. At the
termination of the right to repurchase, since A had so far
failed to make the redemption, but continuing to possess,
may B file an action for unlawful detainer against A?
HELD: Yes, because A’s right to possess has already
expired, and any claim of A regarding ownership should
be considered immaterial.
Rantael v. Court of Appeals
L-47519, Apr. 30, 1980
If a lease is on a “month to month basis” this is a
lease for a definite period, and therefore PD 20 on the
non-ejectment of lessees (with a monthly rent of P300) will
not apply. Ejectment can prosper. (This must be distinguished from a case where all that has been agreed upon
is payment monthly. This is not a lease with a definite
period.)
Torrecampo v. Vitero
20 Phil. 221
FACTS: R mortgaged a certain land to T. Later,
the lands were sold to satisfy a judgment against a third
party. The record does not clearly disclose what were the
rights of the third party in the lands.
HELD: That T’s remedy was an action upon his
mortgage, and not an action of ejectment to recover the
lands.
116
CIVIL CODE OF THE PHILIPPINES
Art. 428
MRR Co. v. Paredes
32 Phil. 534
If a railroad company has the power of eminent
domain and occupies land without exercising it, but with
the express or implied consent of the owner, ejectment
or injunction will not lie, only an action for damages for
the value of the property taken. This is not only on the
ground primarily of public policy, but also of estoppel and
the power eventually to expropriate.
Hilario v. Paulist Congregation
27 Phil. 593
A judgment of dispossession against a third party in
favor of a lessee, will bar a suit against the lessor by the
person dispossessed.
Pascual v. Pascual
33 Phil. 603
An action for ejectment brought primarily to recover
damages, wherein the right to damages, is not insisted on,
will be a bar to a subsequent action for damages where
the facts upon which the parties rely are exactly the same
as in the prior action.
(h)
Right to Damages in Forcible Entry and Unlawful Detainer Cases
The plaintiff in forcible entry or unlawful detainer
cases is entitled to damages, not for those caused to the
property (like destruction) but for those caused by his
being deprived of the use or possession of the premises,
such as the use and collection of fruits. Damages caused
the property itself can only be recovered in an ordinary
action, because the plaintiff in such a case should be the
owner. (Santos v. Santiago, 38 Phil. 575; Dy, et al. v. Kuizon, L-16654, Nov. 30, 1961). In the Santos case (supra),
the plaintiff was able to recover the value of the fruits of
the trees produced, but not the value of the trees that were
117
Art. 428
CIVIL CODE OF THE PHILIPPINES
destroyed or cut down. In the case, it was held that a fair
rental value for the time when plaintiff was deprived of
possession could be recovered as damages. (Sparrevohn v.
Fisher, 2 Phil. 676). In the Dy case, the value of the bangus
fry which disappeared was recovered.
(i)
Effect of No Demand to Vacate, in Case Demand is Essential
If demand to vacate is essential (as in non-payment
of rents) but demand is not made, the case should be
brought before the Court of First Instance (now Regional
Trial Court) and not the justice of the peace or the municipal court. Error on this point is jurisdictional. (Dorado
v. Virina, 34 Phil. 264).
[NOTE: The demand to vacate is essential only if the
tenant detains possession (except if the cause is expiration
of the period), but is not essential if detention is made by
a buyer, seller, or some other person. (See Sec. 2, Rule 70,
Rules of Court).].
Pharma Industries, Inc. v. Pajarillaga
L-53788, Oct. 17, 1980
In an action for unlawful detainer, prior possession
by the plaintiff or petitioner is not always a condition
precedent.
Base v. Leviste
L-52762, Aug. 29, 1980
If after the filing of a motion for execution pending
appeal, the accrued rentals are paid, said payment cannot
prevent execution.
Caminong v. Ubay
L-37900, Feb. 14, 1980
If the judgment in an ejectment case is already final,
writ of execution and a writ of demolition may already be
issued.
118
CIVIL CODE OF THE PHILIPPINES
Art. 428
Base v. Leviste
L-52762, Aug. 29, 1980
If a defeated lessee is unable to comply with the
requisites for the stay or suspension of execution, and the
lessor asks for execution of the decision pending appeal,
it is the ministerial duty of the municipal court to grant
such execution.
(j)
When Judgment Is Executed
1)
If the Justice of the Peace or municipal trial court
decides in favor of the plaintiff (and against the tenant), execution shall issue immediately, unless an
appeal has been perfected, and the defendant, to stay
execution, files a sufficient bond (supersedeas bond)
approved by the Justice of the Peace or municipal
trial court, and executed to the plaintiff to enter the
action in the Court of First Instance (now Regional
Trial Court) and to pay the rents, damages and costs
down to the time of the final judgment in the action;
and unless, during the pendency of the appeal, he
pays to the plaintiff or to the Court of First Instance
(now RTC) the amount of rent due from time to time
under the contract, if any, as found by the judgment
of the Justice of the Peace or municipal trial court to
exist, or in the absence of a contract, he pays to the
plaintiff or into the court, on or before the tenth day
of each calendar month, the reasonable value of the
use and occupation of the premises for the preceding
month at the rate determined by the judgment. (Sec.
19, Rule 70, Rules of Court). The supersedeas bond
answers only for BACK RENTALS however, and
not for those that may accrue during the pendency
of the appeal, which are guaranteed by the periodical deposits to be made by the defendant. (Sison v.
Bayona, L-13446, Sep. 30, 1960).
2)
If the judgment is in favor of the defendant, there is
no judgment for possession that may be executed, because he is entitled to continue in his possession.
119
Art. 428
(k)
CIVIL CODE OF THE PHILIPPINES
Intervention of Mortgagee
A mortgagee does not have any right to intervene
in an ejectment case involving only possession, which is
completely foreign to his claim that the subject matter
of the litigation has been mortgaged to him to secure
payment of a loan. If he wants to have his mortgage declared superior to the claim of possession, his remedy is
to bring a separate action for that purpose, but certainly
not by intervention in the ejectment case. This is because
this matter is beyond the jurisdiction of the Municipal
Court. (De los Santos v. Gorospe, et al., L-12023, Apr. 29,
1959).
(l)
Right to Interpret
Nueva Vizcaya Chamber of Commerce v.
Court of Appeals
L-49059, May 29, 1980
A municipal court has jurisdiction to interpret the
meaning of a renewal clause in a lease contract.
Dayao v. Shell Co. of the Philippines
L-32475, Apr. 30, 1980
A lessor, in an action for unlawful detainer, may sue
for both ejectment and rescission of the lease contract.
(15) The ‘Accion Publiciana’
(a)
The accion publiciana is intended for the recovery of
the better right to possess, and is a plenary action in an
ordinary civil proceeding before a Court of First Instance
(now Regional Trial Court) (Roman Catholic Bishop of
Cebu v. Mangaron, 6 Phil. 286), and must be brought
within a period of ten years, otherwise, the real right of
possession is lost. (See Art. 555, No. 4). The issue is not
possession de facto but possession de jure. (Rodriguez v.
Taino, 16 Phil. 301). The 1948 Judiciary Act did not introduce any modification to the well-established principle
that when deprivation of possession has lasted more than
120
CIVIL CODE OF THE PHILIPPINES
Art. 428
one year, the action to recover falls within the jurisdiction
of the CFI (now RTC). (Firmeza v. David, 92 Phil. 733).
Commonwealth Act 538 which provides for the automatic
suspension of an action for ejectment against tenants occupying lands which the government desires to acquire
thru purchase or expropriation proceedings, applies only
to forcible entry and unlawful detainer cases, and NOT
to ‘accion publiciana.’ (Miranda v. Legaspi, et al., 92 Phil.
290).
Reyes v. Hon. Sta. Maria
L-33213, June 29, 1979
Petitioner sued to recover property (land) which
respondent refused to deliver on the ground that he
(respondent) was the owner thereof, having purchased
the same from a third person. Is this a case of unlawful
detainer?
HELD: No. It is a case of accion publiciana, for the
claim is for possession de jure (not de facto). Thus, the
CFI (now RTC) had jurisdiction. It should not have dismissed the case on the theory that the matter involved
an “unlawful detainer” which should have been filed with
the municipal court.
(b)
Kinds of Plenary Actions to Recover Possession (Accion
Publiciana)
There are two (2) kinds of accion publiciana:
1)
That where the entry was not obtained thru FISTS
(fraud, intimidation, stealth, threat, or strategy).
(This can be brought as soon as the dispossession
takes place, without waiting for the lapse of one
year). (Gutierrez v. Rosario, 15 Phil. 116). Failure
to state that “deprivation” was caused by FISTS
would make the action not one of forcible entry but
accion publiciana. (Gumiran v. Gumiran, 21 Phil.
17). Thus, where the complaint not only shows
prior possession by the defendant but also fails to
allege that the plaintiff was deprived by FISTS, no
case of forcible entry is made out, and the justice of
121
Art. 428
CIVIL CODE OF THE PHILIPPINES
the peace court has NO jurisdiction over the case.
(Valderrama Lumber Manufacturers Co. v. L.S.
Sarmiento, et al., L-18535, May 30, 1962).
2)
That where the one (1)-year period for bringing
forcible entry or unlawful detainer has already expired. [Here the action may still be brought after the
one-year period as accion publiciana, in the Court
of First Instance (now Regional Trial Court); hence,
if brought before the CFI (now RTC) before the
expiration of the one-year period, the action would
still be either forcible entry or unlawful detainer,
and, therefore, the CFI (now RTC) would not have
jurisdiction.] If forcible entry or unlawful detainer
has already been brought or decided upon by the
justice of the peace or municipal trial court, may the
subject be again threshed out in an accion publiciana
brought after the expiration of the one-year period?
The Supreme Court, on this point, has answered in
the negative, on the ground that this would present
a real case of res judicata. (Del Rosario v. Celosia,
26 Phil. 404).
[NOTE: An accion publiciana, which naturally is res
judicata only insofar as one of the parties is held to have the
better right of possession, does NOT bar a subsequent action
between the same parties where one seeks to compel the other
to execute a formal deed of sale over the same property to enable him to obtain a transfer certificate of title in his name,
and to quiet title over the same. (Cabanero v. Tesoro, L-12802,
Feb. 11, 1960).].
Patricio S. Cunanan v. Court of Appeals
L-25511, Sep. 28, 1968
FACTS: Cunanan, in an accion publiciana sued in the
CFI (now RTC) a certain Basaran, alleging that the latter had
usurped the former’s property for over a year before Cunanan
instituted the action. On the basis of this allegation in the
complaint, does the CFI (now RTC) have jurisdiction over the
case?
122
CIVIL CODE OF THE PHILIPPINES
Art. 428
HELD: Yes, for more than one year had elapsed since
the usurpation. If only one year or less had elapsed, the action
should have been instituted in the municipal court (as a forcible
entry or as an unlawful detainer case depending on the facts
alleged).
Venancia Magay v. Eugenio Estiandian
L-28975, Feb. 27, 1976
FACTS: Magay, on the strength of a Torrens title, brought
an accion publiciana (plenary action for the better right of
possession) against Estiandian, who in defense, stated that
Magay’s Torrens title was invalid because she (defendant
Estiandian) had a pending application for a sales patent, and
that therefore the property was still part of the public domain.
Will said defense be considered?
HELD: No, the defense will not be considered. Firstly, Magay’s Torrens title cannot be collaterally attacked. Such validity
of title can be threshed out only in an action expressly filed for
the purpose. Secondly, assuming that the lot is still part of the
public domain, the suit must be instigated by the Republic (thru
the Solicitor General), and not by Estiandian.
Cruz v. Torres
316 SCRA 193
(1999)
Accion publiciana or plenaria de posesion is also used to
refer to an ejectment suit filed after the expiration of 1 year
from the accrual of the cause of action or from the unlawful
withholding of possession of the realty.
Siguan v. Lim
115 SCAD 833, 318 SCRA 725
(1999)
The action to rescind contracts in fraud of creditors is
known as accion pauliana.
While it is necessary that the credit of the plaintiff in an
accion pauliana must exist prior to the fraudulent alienation,
the date of the judgment enforcing it is immaterial — even
123
Art. 428
CIVIL CODE OF THE PHILIPPINES
if the judgment be subsequent to the alienation, it is merely
declaratory with retroactive effect to the date when the credit
was constituted.
(16) The ‘Accion Reivindicatoria’
(a)
The accion reivindicatoria or reivindicatory action is defined as an action to recover ownership over real property.
The action must be brought in the Court of First Instance
(now Regional Trial Court) where the real estate is situated. (Roman Catholic Bishop of Cebu v. Mangaron, 6
Phil. 286). The fact that the value of the improvements
on the land is less than the jurisdictional amount does
not deprive the Court of First Instance (now RTC) of its
authority to take cognizance of an accion reivindicatoria.
(Carpena v. Manalo, et al., L-13143, Apr. 26, 1961). Of
course, if there are pending title proceedings over the
public land involved (pending in the Bureau of Lands),
and the attention of the Court of First Instance (RTC)
is called on this point, the said court must dismiss the
suit, NOT for lack of jurisdiction, but for lack of cause of
action. If the attention of the CFI (RTC) is not called on
this matter, it can still proceed to hear the case. (Pineda
v. Court of First Instance of Davao, et al., L-12602, Apr.
25, 1961). It must be brought within 10 years or 30 years
as the case may be (depending on whether the other party
seeks to obtain ownership by ordinary or extraordinary
prescription).
[NOTE: Insofar as real property is concerned, ordinary prescription which requires, aside from other
requirements for prescription, good faith and just title
runs for 10 years; extraordinary prescription, which does
not require good faith or just title, runs for 30 years.].
[NOTE: When brothers, thru fraudulent representations have been able to succeed in obtaining title in their
names of a parcel of land, thereby depriving their sister of
her rightful share in the inheritance, a constructive trust
is created in favor of said sister. She has therefore the
right to vindicate the property REGARDLESS OF LAPSE
OF TIME. (Eustaquio Jan, et al. v. Vicente Zuñiga, et al.,
124
CIVIL CODE OF THE PHILIPPINES
Art. 428
L-17044, Apr. 28, 1962; see Jacinto v. Jacinto, L-17955,
L-17957, May 31, 1962 and Sevilla v. Angeles, L-7745,
Nov. 18, 1955). It should be observed, however, that this
doctrine of imprescriptibility of an implied trust would
seem to be directly at VARIANCE with the rule stated
in J.M. Tuason and Co. v. Magdangal, L-15539, Jan. 30,
1962, and Cornelio Alzona, et al. v. Gregorio Capunitan, et
al., L-10228, Feb. 28, 1962 that an action for reconveyance
based on an implied or constructive trust prescribes in
ten (10) years.].
[NOTE: One of the actions which does not lapse by
death is that for the recovery of title or possession of real
estate. (Sison and Azarraga v. Balgos, 34 Phil. 885).].
(b)
In the reivindicatory action, the issue involved is ownership, and for this purpose, evidence of title or mode may
be introduced. On this point of ownership, the action differs from accion publiciana where the issue is the better
right of possession (possession de jure); and from “forcible
entry” or “unlawful detainer,” where the issue is material
possession (possession de facto). All three actions however,
though involving real property, are actions in personam,
and are therefore binding only upon the parties and privies thereto. (See Javier, et al. v. Osmeña, et al., 40 O.G. 11,
p. 2277; see also Del Rosario v. Celosia, 26 Phil. 404). Just
as a defendant in a forcible entry or unlawful detainer
case in a justice of the peace court (municipal trial court)
may not quash it and convert the suit to one of reivindication cognizable only by the Court of First Instance (now
RTC), by claiming in his motion or answer that the case
involves ownership or title, so also may a defendant, in
a case involving title to property, NOT convert it into a
suit for ejectment or illegal detainer by merely asking for
possession of the property by means of a counterclaim.
(Feldman v. Encarnacion, et al., L-4494, Sep. 24, 1952).
Armamento v. Guerrero
L-34328, Feb. 21, 1980
It is true that the basic rule is that after the lapse
of one year, a decree of registration is no longer open to
125
Art. 428
CIVIL CODE OF THE PHILIPPINES
review or attack although its issuance is attended with
fraud. (Sec. 38, Act 496). This does not mean however
that the aggrieved party is without remedy at law. If the
property has not yet passed to an innocent purchaser for
value, an action for reconveyance is still available. (Sec.
55, Act 496; Clemente v. Lukban, 53 Phil. 931). If the
property has already passed to an innocent purchaser
for value, the action is one for damages (Dir. of Lands v.
Reg. of Deeds of Rizal, 92 Phil. 826), not one to set aside
the decree. (Ibid.).
Cruz v. Court of Appeals
L-40880, Oct. 23, 1979
FACTS: Respondents sought to recover a parcel of
land from the petitioners 26 years after they had abandoned the property, and during which time the petitioners
had constructed their residences on the land. Should the
complaint in the trial court be an accion publiciana or an
accion reivindicatoria?
HELD: The action can be either, subject of course to
the rules on prescription, and depending on what is desired by the action. However, because of the abandonment,
the respondents will not be allowed to recover, otherwise
stated, the law, justice, and equity will not allow them
“to lie in wait and spring as in an ambush.”
Cristeta L. Vda. de Sengbengco, et al. v.
the Hon. Francisco Arellano, et al.
L-16260, Mar. 8, 1961
FACTS: In Civil Case 3222, an ejectment case was
filed by Sengbengco, et al. against Arturo Piccio, lessee of
an Hacienda allegedly owned by Cuaycong. Cuaycong was
not made a party in said case. The Court ejected Piccio
and declared Sengbengco, et al., as the OWNER of the
Hacienda entitled not only to the possession of the property but also to the fruits thereof, including some sugar
quedans. When the Sheriff was about to proceed with a
public auction sale of the quedans, Cuaycong, alleging
ownership over the Hacienda and its fruits including the
126
CIVIL CODE OF THE PHILIPPINES
Art. 428
sugar quedans, asked the Court to restrain by injunction
the Sheriff from proceeding with the auction sale until
after the question of ownership had been thoroughly
threshed out in another case, Civil Case No. 5404.
HELD: The Court can properly grant the injunction
since Civil Case 3222 was one of ejectment. Moreover, the
declaration of ownership over the Hacienda did not bind
Cuaycong, who was not a party thereto. Finally, the title
over the land, far from being settled, is still the subject
of further cadastral proceedings.
(c)
It is permissible to file both an action for ownership
(reivindicatoria) and for detainer over the same land, and
between the same parties, because the issues involved
are different. Moreover, execution on the detainer can issue as soon as the judgment thereon becomes final. This
is true even if the reivindicatory action is still pending.
(Alejandro v. Court of First Instance of Bulacan, 40 O.G.
[9s] No. 13, p. 128).
Alejandro v. CFI of Bulacan
40 O.G. (9s) 13, p. 128
FACTS: T filed in the Justice of the Peace Court
(now Municipal Trial Court) an action for detainer against
A. A lost but appealed the case to the Court of First Instance (now Regional Trial Court) where A also lost. The
judgment became final, but A filed an action to recover
ownership against T. Meantime, the Court of First Instance (RTC) executed the judgment in the detainer case.
A claims that this is improper inasmuch as the ownership
case is still pending. Hence, this action in the Supreme
Court. Issue: Was the Court of First Instance (RTC) correct in ordering the execution of the final judgment in the
detainer case?
HELD: Yes, the CFI (RTC) was correct. An action
for detainer is after all different from an action to recover
ownership. Said the Supreme Court: “The Court of First
Instance (now RTC) of Bulacan had jurisdiction to order
the execution of its final judgment rendered in the case
127
Art. 428
CIVIL CODE OF THE PHILIPPINES
for detainer.’’ The fact that the petitioner (A) had filed
over the same land another action involving title is no
bar thereto because the latter is compatible with an action for detainer, and both can co-exist and can be filed at
the same time so long as they pursue different purposes
and are regulated by different procedure. (To the same
effect, De Jesus v. Manzano, 29 Phil. 368, which held
that a judgment in forcible entry or unlawful detainer is
not conclusive proof in another action between the same
parties arising out of a different cause of action, nor will
it bar an action between the same parties respecting title
to the land or building.)
Javier, et al. v. Osmeña, et al.
40 O.G. 11, p. 2277
FACTS: A brought an action to recover the ownership
of a piece of land against B. A was declared the lawful
owner. A then proceeded to the land, where he found C
and D possessing the same. With the help of the sheriff,
A succeeded in ejecting C and D from the land. C and D
now complain that in the action filed by A and B, C and D
were not made parties in the proceedings, and that therefore the ruling made by the court should not be enforced
against them. Are C and D correct?
HELD: Yes, C and D are correct. A reivindicatory
action is not an action in rem, but an action in personam.
It should therefore bind merely those who had been made
parties to the action. Judgments rendered in actions in
personam are enforceable only between the parties and
their successors in interest, but not against strangers
thereto. (Sec. 306, par. 2, Act 190; now Rule 39, Sec. 47,
Rules of Court).
Latigay v. Lebiga
(CA) 40 O.G. (4th S), 8, p. 291
FACTS: A wanted to evict B, a tenant, from A’s properties. B said he owned the properties. Although one year
had not yet lapsed, A brought an accion reivindicatoria.
The other party claimed that since the principal intention
128
CIVIL CODE OF THE PHILIPPINES
Art. 428
here is to eject B, the lessor A should have waited one year
before bringing the case to the Court of First Instance (now
RTC). A countered by stating that since his action was a
reivindicatory one (with the consequent right to recover
possession as an incident of ownership), he was justified
in bringing the case to the CFI (RTC). Issue: Does the CFI
(now RTC) have jurisdiction over the case?
HELD: Yes, A’s action was properly brought to the
CFI (now RTC) which has jurisdiction over the case, because after all, he was raising the question of ownership.
Said the Court of Appeals: “When, on the occasion of an
ejectment, the question of title is raised (by the plaintiff)
at the same time, it is not necessary to wait for the lapse
of one year to maintain an action for recovery of property
before the Court of First Instance (now RTC). In other
words, the question of title may be raised at any time
before the CFI (now RTC), even if the cause of action
should also constitute acts of ejectment.”
[NOTE: When each of the contending parties seriously asserts his right to ownership to certain property,
in order to decide the question, it is enough to determine
who of the two is the owner. It is true that to be respected
in the possession of a thing, ordinarily, mere possession
is enough, unless a better right is established by another
individual. Still, from the time it is shown that such possession is unlawful and to the prejudice of the real owner
who has proved his claim by means of a lawful title, the
property usurped must, in justice, be restored to the true
owner. An action for recovery is indeed a right pertaining
to the owner, the ownership being duly proven, and lies
against any person in possession who, without title, unlawfully detains the property of the plaintiff. (Puruganan v.
Martin, 8 Phil. 519; Lubrico v. Arbado, 12 Phil. 391).].
Vda. de Catchuela v. Francisco
L-31985, June 25, 1980
If a squatter files an action for reconveyance of land,
his complaint can be dismissed for “lack of a cause of action.”
129
Art. 428
CIVIL CODE OF THE PHILIPPINES
Armamento v. Guerrero
L-34328, Feb. 21, 1980
An action for reconveyance based on an implied trust,
prescribes in ten (10) years. If based on fraud, the action
prescribes in four (4) years, counted from the discovery
of the fraud.
(d)
Effect of Denial of Petition for Registration under the Torrens System
The denial of a petition for the registration of land,
under the Torrens system, is not res judicata to another
action brought, either for registration of the same land,
or to any action of ejectment. While an alleged owner of
land may have a right sufficient to justify an action of
ejectment, he may not have titles sufficient to justify a
registration of his land under the Torrens system. While
his title may indeed be defective, still the title of the
adversary might still be more defective. (See Ramento v.
Sablaya, 38 Phil. 528).
(e)
Judgment for Ownership Usually Carries with It the Right
to Possession
Cesareo Perez, et al. v. Vicente Evite, et al.
L-16003, Mar. 29, 1961
FACTS: Vicente Evite, et al., were declared in a civil
case as owners of a certain parcel of land. The writ of
execution ordered the sheriff to deliver the land to them,
but the possessors (Cesareo Perez, et al.) refused on the
theory that while the judgment spoke of ownership, it
did NOT mention anything concerning possession. Upon
the other hand, said possessors did NOT give any other
reason why they wanted to retain possession.
ISSUE: Should the possessors surrender their possession?
HELD: Yes, for under Sec. 45 of Rule 39 of the Rules
of Court (now Sec. 47[c], Rule 39, Rules of Court), a judgment is NOT confined to what appears upon the face of
130
CIVIL CODE OF THE PHILIPPINES
Art. 428
the decision, but also to those necessarily included therein
or necessary thereto. Thus, in a land registration case
(Marcelo v. Mencias, L-15609, April 29, 1960) wherein
ownership was adjudged, the Supreme Court allowed the
issuance of a writ of demolition (to remove the improvements existing on the land) because said demolition is
deemed necessarily included in the judgment.
In support of their theory that the adjudication of
ownership does not include possession of the property, the
possessors rely on the cases of Telena v. Garcia (87 Phil.
173) and Jabon, et al. v. Alo, et al. (L-5094, Aug. 7, 1952).
Said decisions however, cannot apply because in both of
them, the Supreme Court underscored the possibility that
the actual possessor therein had some rights which had to
be respected and defined. Thus, the pronouncement that
ownership does not necessarily include possession — was
made in said cases, having in mind instances where
the actual possessor has a valid right (such as that of a
tenant or lessee) over the property, a right enforceable
even against the owner thereof. In the present case, no
such right for continued possession has been asserted.
Therefore, the possessors must also surrender possession.
Indeed, it would frustrate the ends of substantial justice
were the owners are to be required to submit to a new
litigation.
(f)
Adjudication of Ownership Does Not Necessarily Include
Possession
Olejo v. Hon. A. Rebueno
L-39350, Oct. 29, 1975
The adjudication by the court of ownership in favor
of one party does not necessarily include the adjudication
of possession over the same. The exception is when the
party defeated has not been able to show any right to
possess independent of his claim of ownership. In such a
case, what the declared owner should do, if he desires to
enforce his right to possess the property, is to file a motion
for a writ of execution.
131
Art. 428
(g)
CIVIL CODE OF THE PHILIPPINES
Deprivation of Ownership by Virtue of a Law
Oreng Igo (Bagobo), et al. v. National Abaca
and Other Fibers Corporation, et al.
L-13208, May 18, 1960
An ordinary accion reivindicatoria does NOT exist
when the plaintiff alleges that he has been deprived of
his land by virtue of a law, such as the Trading with the
Enemy Act, as amended, in relation to the Philippine
Property Act of 1946 — statutes which transferred certain
lands from the U.S. to the Philippine Republic.
(h)
Value of a Torrens Title
Demasiado v. Velasco
L-27844, May 10, 1976
A Torrens certificate prevails over unregistered
Deeds of Sale.
(i)
Torrens Title as Conclusive Evidence of Ownership
Salao v. Salao
L-26699, Mar. 16, 1976
A Torrens Title is generally a conclusive evidence
of the ownership of the land referred to therein. (Sec. 47,
Act 496). A strong presumption exists that Torrens titles
were regularly issued and that they are valid. In order to
maintain an action for reconveyance, proof as to the fiduciary relation of the parties must be clear and convincing.
(Yumul v. Rivera & Dizon, 64 Phil. 13).
Victorias v. Leuenberger and CA
GR 31189, Mar. 31, 1987
The Torrens System was not established as a means
for the acquisition of title to private land. It is intended
merely to confirm and register the title which one may
already have on the land. Where the applicant possesses
no title or ownership over the parcel of land, he cannot
acquire one under the Torrens system of registration.
132
CIVIL CODE OF THE PHILIPPINES
Art. 428
While an inherent defective Torrens title may not
ordinarily be cancelled even after proof of its defect, the
law nevertheless safeguards the rightful party’s interest
in the titled land from fraud and improper use of technicalities by allowing such party, in appropriate cases,
to judicially seek reconveyance to him of whatever he
has been deprived of as long as the land has not been
transferred or conveyed to a purchaser in good faith. The
Torrens system was never calculated to foment betrayal
in the performance of a trust.
National Grains Authority v. IAC
GR 68741, Jan. 28, 1988
All persons dealing with property covered by a Torrens Certificate of Title are not required to go beyond what
appears on the face of the title. When there is nothing on
the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrances thereon,
the purchaser is not required to explore further than what
the Torrens title upon its face indicates in quest for any
hidden defect or inchoate right that may subsequently
defeat his right thereto.
Santos v. Aquino
L-32949, Nov. 28, 1980
If registered land expands or increases in size, the
determination of the ownership over such expansion or
increase is lodged not with the original registration court
but with a court of general jurisdiction. The petition
for clarification of title over the registered land may be
regarded as an action for declaratory relief or quieting
of title. Hence, the same is within the competence of an
ordinary civil court.
Talanan Development Corporation v.
Court of Appeals
GR 55771, Nov. 15, 1982
FACTS: A petition for the reconstitution of a Torrens
Title was opposed on the ground that according to an al133
Art. 428
CIVIL CODE OF THE PHILIPPINES
leged survey plan other people were the owners of the lot
involved. It was further contended that the survey plan
existed long before the original certificate of title was issued. The existence of the alleged survey plan was denied
by the Director of Lands. It was proved that the title has
already passed from hand to hand, all subsequent holders
being innocent purchasers for value. Should the Torrens
title be reconstituted?
HELD: Yes. Firstly, the existence of the survey plan
is doubtful. Secondly, innocent purchasers rely on the
indefeasibility of the Torrens title.
Alipoon v. CA
305 SCRA 118
(1999)
The purpose of the reconstitution of title or any
document is to have the same reproduced, after proper
proceedings in the same form they were when the loss or
destruction occurred.
(17) Writ of Injunction
A person deprived of his possession of real or personal
property is ordinarily not allowed to avail himself of the remedy
of preliminary preventive or prohibitory injunction, the reason
being that the defendant in actual possession is presumed disputably to have the better right. (Devesa v. Arbes, 13 Phil. 273;
Palafox v. Madamba, 19 Phil. 444; Evangelista v. Pedrenos, 27
Phil. 648). Under the Civil Code, however, under certain conditions, and in view of the frequent delays in cases of this nature,
the remedy of the writ of preliminary mandatory injunction
may be availed of in the original case of forcible entry; and
during the appeal, in the case of unlawful detainer.
(a)
Original Case of Forcible Entry
“A possessor deprived of his possession thru forcible
entry may within 10 days from the filing of the complaint
present a motion to secure from the competent court, in
the action for forcible entry, a writ of preliminary man134
CIVIL CODE OF THE PHILIPPINES
Art. 428
datory injunction to restore him in possession. The court
shall decide the motion within 30 days from the filing
thereof.’’ (Art. 539, 2nd paragraph).
(b)
Appealed Case of Unlawful Detainer
“In ejectment (unlawful detainer, as contemplated
by this article, involving a lease contract) cases where an
appeal is taken, the remedy granted in Art. 539, second
paragraph, shall also apply, if the higher court is satisfied
that the lessee’s appeal is frivolous or dilatory, or that the
lessor’s appeal is prima facie meritorious. The period of
ten days referred to in said article shall be counted from
the time the appeal is perfected.’’ (Art. 1674). (Actually,
the counting must be from the moment the attorneys are
notified of the perfection of the appeal).
Even in the cases not provided for in Arts. 539 and
1674, the remedy of injunction is nevertheless proper and
allowed in the following instances:
(a)
If an owner, still in possession, desires to prevent repeated
or further intrusions into his property by a stranger who,
for example, persists in entering and cutting off wood or
other products of the land. (Rustia v. Franco, 41 Phil. 281).
Upon the other hand, if the defendant has already entered
into possession through FISTS, and threatens or is about
to commit a new incursion and usurpation by the same
means, a continuing usurpation is being committed, the
remedy of the plaintiff is an action of forcible entry where
he may obtain a writ of preliminary injunction, and NOT
an independent action for injunction. (Casenas, et al. v.
Jandayan, L-17593, May 31, 1962).
(b)
If a person in possession of the real property in concepto
de dueno for over a year (possessor de jure) (although not
the owner), is disturbed by acts similar to those referred
to in (a). (See Wemple v. Eastham, 144 La. 957).
[NOTE: A decision denying injunction against defendants, prohibiting trespass and spoliation of plaintiff’s
land, does not bar a suit in ejectment for the lands against
said defendants. (Garen v. Del Pilar, 17 Phil. 132).].
135
Art. 428
CIVIL CODE OF THE PHILIPPINES
(18) Writ of Possession
A writ of possession used in connection with the Land
Registration Law is an order directing the sheriff to place a
successful registrant under the Torrens system in possession
of the property covered by a decree of the Court. (See Sec. 17,
Act 496 as amended by Sec. 6 of Act 680). Thus, it is NOT essential for the successful litigant to institute another action
for the precise purpose of obtaining possession of the land,
otherwise there would be multiplicity of suits. (Marcelo v.
Mencias, L-15609, Apr. 29, 1960). The writ of possession cannot
be used either against the party in whose favor the land has
been decreed to be registered, or against his representatives or
successors-in-interest. It may be issued only against the person
defeated in the registration case, and against anyone unlawfully and adversely occupying the land or any portion thereof,
during the proceedings, up to the issuance of the final decree.
(Bishop of Legaspi v. Calleja, et al., L-14134, May 25, 1960).
The reason why the writ of possession can be issued against
any such adverse possessor is clear: the issuance of the decree
of registration is part of the registration proceedings. In fact,
it is supposed to END the said proceedings. Consequently, any
person unlawfully and adversely occupying said lot at any time
up to the issuance of the final decree, may be subject to judicial
ejectment by means of a writ of possession, and it is the duty
of the registration court to issue said writ when asked for by
the successful claimant. (Demorar v. Ibañez, 97 Phil. 72; Julio
Lucero v. Jaime L. Loot, et al., L-16995, Oct. 28, 1968). And
even if the decree of registration is attacked in another case as
being fraudulent, the mere pendency of this ordinary action is
not a bar to the issuance of the writ of possession applied for
by the registered owner. (See Sorongon v. Makalintal, 80 Phil.
259). If the writ of possession cannot be issued to the successful registrant, and he would be compelled to institute other
actions for the recovery of his property, we may well say that
he cannot enjoy the fruits of his victory. (Pasay Estate Co. v.
Del Rosario, 11 Phil. 39; Manlapas v. Llorente, 48 Phil. 298). If
the writ of possession implies the delivery of possession of the
land to the successful litigant therein, a writ of DEMOLITION
must likewise issue, otherwise, the writ of possession may be
136
CIVIL CODE OF THE PHILIPPINES
Art. 428
ineffective. (Marcelo v. Mencias, L-15609, Apr. 29, 1960). Indeed, a writ of demolition is merely a complement of a writ of
possession. (Lucero v. Loot, L-16995, Oct. 28, 1968).
The right to demand the writ of possession never prescribes. The reason given by the court being the provision of
Sec. 46 of Act 496 that lands with a Torrens title cannot be
acquired by prescription (Manlapas and Tolentino v. Dorente,
48 Phil. 298), nor will laches or neglect defeat the right to recovery. (J.M. Tuason and Co. v. Macalingdong, L-15398, Dec. 29,
1962). If the writ of possession has been issued once, it will not
be issued again. (Locsin and De Guzman v. Diaz, 42 Phil. 22).
Nor will a writ of possession ever be issued against a person
who began to possess the land only after the land had already
been registered. (Sorongon, et al. v. Makalintal, et al., 45 O.G.
9, p. 3820, Sep. 1, 1949). Indeed such subsequent possessors
cannot be summarily ousted merely by a motion for a writ of
possession, regardless of the title or right which they claim to
have. (Maglasang v. Maceren, et al., 46 O.G. 11, p. 90, Supp.,
Nov. 1950). The remedy for the registered owner would thus
be only forcible entry, unlawful detainer, accion publiciana or
accion reivindicatoria. (Manuel v. Rosauro, 56 Phil. 365).
NOTA BENE: The issuance of the writ of possession is
SUMMARY IN NATURE, hence, the same cannot be considered
a judgment on the merits which is defined as “one rendered after a determination of which party is RIGHT, as distinguished
from a judgment rendered upon some preliminary or formal
technical point.’’ (A.G. Development Corp. v. NLRC, 88 SCAD
518 [1997]).
PNB v. Adil
GR 52823, Nov. 2, 1982
If as a result of an extrajudicial foreclosure sale of a
real mortgage, the lot is purchased, and is not redeemed
within the period of redemption, the buyer is entitled to
a writ of possession. In fact, he is entitled to the writ even
before the period of redemption expires as long as a proper
motion for the purpose has been filed, a bond approved,
and no third person is involved.
137
Art. 428
CIVIL CODE OF THE PHILIPPINES
(19) Right of Ownership Not Absolute
The right of ownership is not absolute. There are limitations which are imposed for the benefit of humanity, and which
are based on certain legal maxims, such as the following:
(a)
The welfare of the people is the supreme law of the
land.
(b)
Use your property so as not to impair the rights of
others. “Sic utere tuo ut alienum non laedas.’’ “The
owner of a thing cannot make use thereof in such a
manner as to injure the rights of a third person.’’
(Art. 431).
(20) The Limitations on Ownership
(a)
Those given by the State or the Law.
(b)
Those given by the owner (or grantee) himself.
(c)
Those given by the person (grantor) who gave the thing
to its present owner.
(21) Examples
(a)
Limitations imposed by the State — police power, power
of taxation, power of eminent domain.
(b)
Limitations imposed by the Law — the legal easement of
waters, the legal easement of right of way.
(c)
Limitations imposed by the owner — when the owner leases his property to another, said owner in the meantime
cannot physically occupy the premises; when the owner
pledges his personal property, he has in the meantime to
surrender its possession.
(d)
Limitations imposed by the grantor — the donor may
prohibit the donees from partitioning the property for a
period not exceeding twenty (20) years.
(22) The Limitation of ‘Police Power’
Police power is the right of the State to regulate and
restrict personal and property rights for the common weal.
138
CIVIL CODE OF THE PHILIPPINES
Art. 428
(Director of Lands v. Abella, 54 Phil. 455). The Supreme Court
has defined it as the power to prescribe regulations to promote
the health, morals, education, good order or safety, and the
general welfare of the people. (Primicias v. Fugoso, 80 Phil. 71;
See also Barbier v. Connolly, 113 U.S. 27). Police power is a
limitation on the right of ownership in the sense that property
may be interfered with, even destroyed, if the welfare of the
community so demands it. Sec. 2238 of the Revised Administative Code requires that an ordinance enacted by a municipality
under the “general welfare clause” should be to “provide for the
health and safety, promote the prosperity, improve the morals,
peace, good order, comfort, and convenience of the municipality
and the inhabitants thereof, and for the protection of property
therein.” (Pampanga Bus Co., Inc., et al. v. Mun. of Tarlac, L15759, Dec. 30, 1961).
Police power is based on the Latin maxim — salus populi
est suprema lex (the welfare of the people is the supreme law)
and sic utere tuo ut alienum non laedas (“so use your own as
not to injure another’s property”). For the State to exercise
police power, it is essential that —
(a)
the interests of the public in general, as distinguished
from a particular class, require such interference;
(b)
the means should be reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon individuals. (U.S. v. Toribio, 15 Phil.
85).
Moreover, while the power to enact laws intended to
promote the general welfare of society is inherent in every
sovereign state, such power is not without limitations, notable
among which is the prohibition against the taking of private
property for public use without just compensation. (Municipality of Lucban v. NAWASA, L-15525, Oct. 11, 1961).
(23) Exercise of Police Power
Police power has been used:
(a)
to abate nuisances, whether public or private, whether
nuisances per se or nuisances per accidens. (See Iloilo Cold
Storage Co. v. Council of Iloilo, 24 Phil. 471).
139
Art. 428
CIVIL CODE OF THE PHILIPPINES
(b)
to destroy a house so that fire would not spread.
(c)
to require tenements to be connected to city sewers. (Case
v. Board of Health, 24 Phil. 165).
(d)
to prohibit the sale of fresh meat (not cold storage meat)
outside public market. (Co Kiam v. City of Manila,
L-6762, Feb. 28, 1955).
(e)
to regulate the killing for human consumption of large
cattle still fit for work. (U.S. v. Toribio, 15 Phil. 85).
(f)
to remove billboards which are offensive to sight. (Churchill and Tait v. Rafferty, 32 Phil. 580).
(g)
to demand that buildings be constructed so as to abut a
public street or alley or an approved private street or alley. (Fabie v. City of Manila, 21 Phil. 486).
(h)
to regulate interest rates and prohibit usury in any form.
(U.S. v. Constantino, 39 Phil. 553).
(i)
to require permit before an owner of land bordering
government property may fence off his land. (People v.
Maluzarte, 40 O.G. No. 12 [8th S], p. 71).
(j)
to regulate the installation of gasoline stations so as to
become reasonably distanced from one another to prevent
both ruinous competition and any consequent danger to the
public that may be occasioned by the presence of gasoline.
(Javier and Ozaeta v. Earnshaw, 64 Phil. 626).
(k)
to prohibit structures offensive to sight (Churchill and
Tait v. Rafferty, 32 Phil. 580) but not to prevent an owner
from erecting on his own land a beautiful house simply
because by doing so, the view of a public plaza from the
highway would be impaired. What the municipality affected should do would be to expropriate the property and
not merely prohibit the construction. (People v. Fajardo,
L-12172, Aug. 29, 1958).
(l)
to declare by ordinance, market stalls held by aliens, as
vacant, so that Filipino applicants, may be preferred.
(Chua Lao, et al. v. Raymundo, et al., L-12662, Aug. 18,
1958).
140
CIVIL CODE OF THE PHILIPPINES
Art. 428
(m) to enact the Social Security Law. (Roman Cath. Archbishop of Manila v. Social Security Commission, L-15045,
Jan. 20, 1961).
(n)
to implement the Comprehensive Agrarian Reform Law
(CARP). (Roxas and Co., Inc. v. CA, 117 SCAD 589, 321
SCRA 106 [1999]).
(24) No Financial Compensation in Police Power
When by police power, private property is impaired or
destroyed in the interest of the public weal, financial compensation is not, unlike in eminent domain, given to the owner.
(U.S. v. Toribio, 15 Phil. 85). What he gets in return, however,
are the benefits arising from a healthy economic standard of
society. (See Churchill and Tait v. Rafferty, 32 Phil. 580). In a
sense, therefore, taking of property because of police power is
“damage without injury” — damnum absque injuria. (Ibid.).
(25) Police Power in Whom is Vested
Police power is vested primarily in Congress of the Philippines, but its exercise may be delegated to municipal corporations (thru the “general welfare clause’’), and sometimes to the
President of the Philippines during periods of emergency. (Lim
v. Register of Deeds, 46 O.G. 3665). Unless properly authorized
by Congress, executive officials cannot ordinarily interfere with
the property of an individual.
(26) The Power of Taxation and How It Limits Ownership
Taxation is the inherent power of a State to raise income
or revenue to defray necessary governmental expenses for a
public purpose. (Gruen v. State Tax Com., 211 Pac. 2d. 651;
see also Cooley, Taxation, 4th Ed., p. 72). Thus, thru taxation,
the cost of governing is apportioned among those who in some
measure are privileged to enjoy benefits and must consequently
bear the burdens of government. (Welch v. Henry, 305 U.S.
134). Indeed, it has been said that of all the powers of government, the power of taxation is the strongest, for as Chief Justice
John Marshall would have it, it involves “the power to destroy.”
(See McCollough v. Maryland, 4 Wheat 316). Congress has the
141
Art. 428
CIVIL CODE OF THE PHILIPPINES
exclusive power to tax, although this right may be, as is often
the case, delegated to municipal corporations. (Spencer v. Merchant, 125 U.S. 345). Real as well as personal property may
be taxed, and unless the taxes are paid there is danger that
the property may be seized and confiscated by the government.
Taxation, in this sense, is a limitation on the right of ownership. The sale and forfeiture of the property to the Government
in the absence of bidders operate to discharge tax claims up to
the value of the property forfeited. The remedy by RESTRAINT
and LEVY may be repeated if necessary until the full amount
due, including all expenses, is collected. (Castro v. Collector of
Internal Revenue, L-12174, Apr. 26, 1962). A city treasurer does
not have to follow a fiscal’s (now prosecutor) opinion on the
legality of a tax — for said fiscal’s (now prosecutor’s) opinion
is merely advisory. (Phil. Match Co. v. City of Cebu, L-30745,
Jan. 18, 1978).
Phil. Fiber Processing Co. v.
Commissioner of Internal Revenue
L-27212, Aug. 31, 1973
ISSUE: If a person has a “deficiency income tax assessment,” but was able in time to avail himself of the tax amnesty
under Presidential Decree No. 68, what happens to an APPEAL
said taxpayer had previously made?
HELD: The appeal is rendered moot and academic, in
view of the amnesty.
Estate of the late Mercedes Jacob v. CA
89 SCAD 962
(1997)
[O]ne who is no longer the lawful owner of the land cannot
be considered the “present registered owner’’ because, apparently, he has already lost interest in the property, hence, is
not expected to defend the property from the sale at auction.
The purpose of PD 464 is to collect taxes from the delinquent
taxpayer and, logically, one who is no longer the owner of the
property cannot be considered the delinquent taxpayer.
142
CIVIL CODE OF THE PHILIPPINES
Art. 428
Cenido v. Apacionado
318 SCRA 688
(1999)
Real property tax shall be assessed in the name of the
person “owning or administering’’ the property on which the
tax is levied, and a tax declaration in the name of a person
who has NO SUCCESSIONAL or ADMINISTRATIVE rights
to a decedent’s estate is null and void.
(27) ‘Taxation’ Distinguished from ‘Other Governmental Powers’
TAXATION
(1) Compensation
EMINENT
DOMAIN
(1) generally, a better (1) f i n a n c i a l o r
government (with
monetary comconsequent protecpensation
tion to life, liberty,
and property)
(2) P e r s o n s i n - (2) operates on a class, (2) operates on an
volved
individual (the
according to some
owner of the
principle of apporproperty)
tionment
(3) Nature of the (3) paid by citizen as (3) allowed by the
citizen, but
his CONTRIBUduty
NOT as a conTION to a public
tribution to a
burden
public burden
(4) Manner of ex- (4) generally, no com- (4) a property
owner is made
plaint is filed in
ercise
a defendant in
court. It is the pubthe complaint
lic that, in general,
(expropriation
is required to pay
is a forced sale)
(See People v. City of Brooklyn, 35 Am. Dec. 266).
143
Art. 428
CIVIL CODE OF THE PHILIPPINES
TAXATION
(1) Purpose
(1) to raise revenue
(2) C o m p e n s a tion
POLICE POWER
(1) to promote the
public welfare
by system of
regulation
(2) taxpayer is com- (2) citizen’s compenpensated by obvisation is more or
ous and apparent
less intangible,
benefits
an idealistic realization that
society has in
some way benefited
(3) Amount paid
(3) may be small or (3) fee paid is just
big (courts cannot
enough to cover
decree the amount
necessary
paid as unreasonexpenses for
able)
regulation or
inspection
(U.S. v. Toribio, 51 Phil. 85; Cu Unjieng v. Patstone, 42 Phil. 818).
Ereve v. Escaros
L-26993, Dec. 19, 1980
A tax declaration cannot generally prevail over adverse
possession for a long period of the disputed lot nor over a private deed of sale.
Gesmundo v. CA
321 SCRA 487
While tax declarations and receipts are not conclusive
evidence of ownership, yet, when coupled with proof of actual
possession, tax declarations and receipts are strong evidence
of ownership.
144
CIVIL CODE OF THE PHILIPPINES
Art. 429
(28) Eminent Domain (See Comments under Art. 435)
(29) Burdens of Ownership
While an owner has certain rights over his property, subject
to the limitations hereinabove already discussed, he suffers also
from certain disadvantages or consequences of said ownership.
For example, we have the rule of “res perit domino’’ (the owner
bears the loss of the property owned by him).
Warner, Barnes and Co., Ltd. v. Ramon Flores
L-12377, Mar. 29, 1961
FACTS: In 1940, Ramon Flores purchased from the plaintiff approximately P3,000 worth of fertilizer, due on or before
Dec. 31, 1941, with interest compounded quarterly. Flores executed a chattel mortgage on 951 piculs of sugar owned by him
to guarantee the obligation. In said deed of chattel mortgage,
the mortgagee-plaintiff was authorized to sell the sugar in case
of non-payment on the date of maturity, and to retain from
the proceeds of such sale the value of the debt plus interest,
and to turn over any surplus to Flores. Due to non-payment
at maturity, the sugar was offered for sale, but unfortunately
no sale could be made because of lack of shipping facilities and
the eventual involvement of the Philippines in World War II.
During the Japanese Occupation, all the sugar mortgaged were
either burned or looted.
ISSUE: Who bears the loss of the sugar?
HELD: Flores bears the loss of the sugar because at the
time of its loss, he was still the owner thereof. The deed of
chattel mortgage did NOT transfer ownership to the mortgagee,
for if the latter were already the owner thereof, there would
have been no necessity for returning any surplus. Hence, Flores
must still pay.
Art. 429. The owner or lawful possessor of a thing has
the right to exclude any person from the enjoyment and
disposal thereof. For this purpose, he may use such force as
may be reasonably necessary to repel or prevent an actual
or threatened unlawful physical invasion or usurpation of
his property.
145
Art. 429
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Doctrine of ‘Self-Help’
This Article speaks of the principle of self-help, namely,
the right to counter, in certain cases, force with force.
(2) Examples
(a)
I have a car; I see a thief about to get it. I can use force in
driving the thief away, provided that the means I resort
to are reasonable. As a matter of fact, I can even chase
him immediately and recover the car from him by force.
If, however, I lose sight of him, and I see him only two or
three days later, I will not be justified in taking the law
into my own hands. I will have to resort to the courts of
justice.
(b)
What has been said in the above example may also be said
if the property involved is a house or some other form of
real property. The person, however, against whom I have
the right to use force should really be an “aggressor.’’ One
has no right at all, thus, to prevent by force, a sheriff from
lawfully levying on his property, or to prevent a policeman
from confiscating evidence of a crime in his possession.
(c)
It has recently been held that if a person finds a neighbor’s
pig among the plants on his land, the proper thing for him
to do is to drive the pig away, and to file a civil action
against the owner of the pig for damage to the plants. It
would be wrong for him to shoot the pig to death for the
purpose of vengeance — and for such an act, he can be
convicted of the crime of malicious mischief. (People v.
Segovia, L-11748, May 28, 1958).
(3) Self-Defense under the Law
Self-defense is treated of in Art. 11, par. 1 of the Revised
Penal Code, and includes not only defense to a man’s person
but also that of his rights, including the right to property. Although in a decision of May 7, 1913 of the Supreme Court of
Spain, it was held that force could be used only when physical
harm threatens the owner or protector of the property, under
146
CIVIL CODE OF THE PHILIPPINES
Arts. 430-431
Art. 429 of the Civil Code, force may be used even without
such threatened bodily danger — provided that defense, and
not vengeance, is involved.
Art. 430. Every owner may enclose or fence his land or
tenements by means of walls, ditches, live or dead hedges,
or by any other means without detriment to servitudes constituted thereon.
COMMENT:
Fencing of Land or Tenements
Example: A person may fence off his house and lot unless he denies others a right of way to which the latter may be
entitled. In one case, the lands of A were being flooded because
B, the owner of certain lands, in order to maintain a fish pond,
closed his (B’s) estate, thus closing the outlet to the river of
water on A’s property. The question was whether B had the
right to so fence his estate.
HELD: No, B had no right to prevent the outflow of the
water from A’s estate. While he had the right to fence his estate,
still he should not impair the servitudes or burdens constituted
thereon. (Lunod v. Meneses, 11 Phil. 128).
Art. 431. The owner of a thing cannot make use thereof
in such manner as to injure the rights of a third person.
COMMENT:
(1) No Injury to Rights of Third Persons
This is one of the fundamental bases of police power, and
constitutes a just restriction on the right of ownership.
(2) Examples
I cannot blow my saxophone in the middle of the night
because I would unduly disturb the rights of others to a peaceful sleep. If Gloria owns a house on an isolated farm in Lucena,
147
Art. 432
CIVIL CODE OF THE PHILIPPINES
she can burn said house; but if she owns one in Manila, in a
busy district where there are many houses, she cannot burn the
house in view of the possible harm to others. Nuisances may
be abated judicially or extrajudicially, and one responsible for
the existence or continuation of a nuisance can be held liable
by those who may suffer injury thereby. (See Arts. 694-707).
Art. 432. The owner of a thing has no right to prohibit
the interference of another with the same, if the interference
is necessary to avert an imminent danger and the threatened
damage, compared to the damage arising to the owner from
the interference, is much greater. The owner may demand
from the person benefited indemnity for the damage to
him.
COMMENT:
(1) State of Necessity
This Article refers to a state of necessity as distinguished
from the principle of self-help enunciated in Art. 429.
(2) Rule Under Criminal Law
Under the Revised Penal Code, the state of necessity is
considered a justifying circumstance.
Any person who, in order to avoid an evil or injury, does
an act which causes damage to another does not incur criminal
liability provided that the following requisites are present:
(a)
that the evil sought to be avoided actually exists;
(b)
that the injury feared be greater than that done to
avoid it;
(c)
that there be no other practical and less harmful
means of preventing it. (Art. 11, par. 4, Rev. Penal
Code).
(3) Examples
(a)
To prevent fire from spreading and thus burning valuable
houses, firemen may dynamite or destroy barong-barongs
148
CIVIL CODE OF THE PHILIPPINES
Art. 433
between the fire and the shacks so as to stop the fire. The
owners of the barong-barongs have no right to interfere.
However, the owners of the buildings saved will have to
compensate the owners of the shacks destroyed. (See also
Viada, Codigo Penal, 166).
(b)
While I am driving an automobile with due care, an animal stands right across my path rushing towards me. On
either side of me is a precipice. I am thus forced to decide
whose life I would save — mine or that of the animal. If
I kill the animal by driving straight across, the owner of
the animal, if he should happen to be nearby, has no right
to interfere with the destruction of his animal.
Art. 433. Actual possession under claim of ownership
raises a disputable presumption of ownership. The true
owner must resort to judicial process for the recovery of the
property.
COMMENT:
(1) Disputable Presumption of Ownership
Two requirements to raise a disputable (rebuttable) presumption of ownership.
(a)
actual possession; and
(b)
claim of ownership.
Thus, a tenant, who admits his tenancy, cannot be
presumed to be the owner. Moreover, just because a person works on a parcel of land does not necessarily mean
that he is the owner thereof, particularly if he has not
expressed the concept in which the land was being worked
upon by him. (Alano, et al. v. Ignacio, et al., L-16434, Feb.
28, 1962).
(2) Applicability of the Article
Art. 433 applies to both immovable and movable property.
149
Art. 434
CIVIL CODE OF THE PHILIPPINES
(3) Similarity to Art. 541
Art. 433 is similar to Art. 541 which provides that “a
possessor in the concept of owner has in his favor the legal
presumption that he possesses with a just title and he cannot
be obliged to show or prove it.’’
(4) Recourse to Judicial Process
The true owner has to resort to judicial process to recover
his property, only if the possessor does not want to surrender
the property to him, after proper request or demand has been
made. Judicial process must then be had to prevent disturbances of the peace. (Supia v. Quintero, 59 Phil. 312).
Art. 434. In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his
title and not on the weakness of the defendant’s claim.
COMMENT:
(1) Requisites in an Action to Recover
(a)
Property must be identified.
(b)
Reliance on title of the plaintiff (and not on the weakness
of defendant’s title or claim). (This is because it is possible
that neither the plaintiff nor the defendant is the true
owner of the property in question.)
[NOTE: These requisites are based on the doctrines
enunciated by our Supreme Court in Del Valle v. Meralco,
34 Phil. 963. These requisites in turn are based on the
proposition that the burden of proof lies on the party who
substantially asserts the affirmative of an issue. For he
who relies upon the existence of a fact should be called
upon to prove that fact. (See Ramcar, Inc. v. Garcia,
L-16997, Apr. 25, 1962).].
[NOTE: One who desires to recover land as owner
from another person upon the theory that the deeds held
by the other party are null and void, must first ask that
such alleged fraudulent deeds be set aside. He cannot have
150
CIVIL CODE OF THE PHILIPPINES
Art. 434
such documents annulled in a subsidiary action. (Dacer
v. Muñoz, 12 Phil. 328).].
(2) First Requisite: Identity of the Property
The boundaries of the land sought must be proved, so that
if a person fails to specify which portion of a parcel of land is
the portion he is supposed to have inherited, his action to recover the property will necessarily fail. (Santiago v. Santos, 48
Phil. 567). What is true in an ordinary action to recover property is also true in the case of an application for the registration
of land under the Land Registration Act, because the claimant
must also prove in an unquestionable manner, his ownership
and identity of the property claimed. (Oligan v. Mejia, 17 Phil.
494). In cases of doubt as to the land’s identity, the lower court
should require each party to present plans prepared by some
competent person. (Baloloy v. Edu, 20 Phil. 360). The description should be so definite that an officer of the court might go
to the locality where the land is situated and definitely locate
it. (Sambrano v. Arzaga and Longboy, 22 Phil. 130).
(3) Second Requisite: Strength of Plaintiff’s Title
If the claims of both plaintiff and defendant are weak,
judgment must be for the defendant, for the latter, being in
possession, is presumed to be the owner, and cannot be obliged
to show or prove a better title. (Santos v. Espinosa, 26 Phil.
398). Among the evidence which may be presented by plaintiff
to show ownership are the following:
(a)
Torrens certificate. (Reyes v. Borbon, 50 Phil. 791).
(b)
Titles granted by the Spanish Government, like those
effected by royal cedula (Guido v. De Borja, 12 Phil.
718) and “titulo de composicion.’’ (Escario v. Regis,
31 Phil. 618).
(c)
Long and actual possession. (Nolan v. Jalandoni, 23
Phil. 292).
(d)
Occupation of a building for a long time without paying rentals therefor. (Gatdula v. Santos, 29 Phil. 1).
(e)
Testimony of adverse and exclusive possession of
ownership corroborated by tax declaration of proper151
Art. 435
CIVIL CODE OF THE PHILIPPINES
ties, payment of taxes, and deeds of mortgage (but
not the mere fact of working over the land without
expressing the concept in which the land was being
worked). (Consorcia Alano, et al. v. Carmen Ignacio,
et al., L-16434, Feb. 28, 1962).
[NOTE: These pieces of evidence, though admissible, do not necessarily mean that they are conclusive proof of ownership. They may therefore still be
defeated or rebutted.].
[NOTE: It has been held that in the absence of
evidence of ownership, the mere fact that a map in the
city’s possession showed that the property involved
was a portion of a street does NOT prove dominium by
the State. (Acuña v. City of Manila, 9 Phil. 225).].
[NOTE: If land is registered under the Land Registration Law in the name of “M.R. married to R.L.,” it
is evident that prima facie the land belongs to “M.R.”
(the wife), alone as her paraphernal property, for if
it were conjugal, the title should have been issued in
the name of both. The words “married to R.L.,” written after the name of M.R., are merely descriptive of
the civil status of M.R., the registered owner of the
property covered by the title. (Litam, et al. v. Espiritu,
et al., L-7644-45, Nov. 27, 1956; Florentina Mata de
Stuart v. Hon. Nicasio Yatco, et al., L-16467, Apr. 27,
1962).].
Art. 435. No person shall be deprived of his property
except by competent authority and for public use and always
upon payment of just compensation.
Should this requirement be not first complied with, the
courts shall protect and, in a proper case, restore the owner
in his possession.
COMMENT:
(1) ‘Eminent Domain’: Definition and Purpose
Eminent domain, or the superior right of the State to own
certain properties under certain conditions, is a limitation on
152
CIVIL CODE OF THE PHILIPPINES
Art. 435
the right of ownership, and may be exercised even over private
properties of cities and municipalities, and even over lands
registered with a Torrens title. According to Cooley, it is the
right of the State to acquire private property for public use
upon payment of just compensation. (Cooley’s Constitutional
Limitations, 8th Ed., p. 110). Inherently possessed by the national legislature, the power of eminent domain may be validly
delegated to local governments, other public entities and public
utilities. (Moday v. CA, 79 SCAD 816 [1997]). Eminent domain
or expropriation is based on the need for human progress and
community welfare or development. The power of eminent
domain is inseparable from sovereignty, being essential to the
existence of the State and inherent in government even in its
most primitive forms. No law, therefore, is even necessary to
confer this right upon sovereignty, or upon any government
exercising sovereign or quasi-sovereign powers. (Visayan Refining Co. v. Camus and Paredes, 40 Phil. 550).
De Knecht v. Bautista
L-51078, Oct. 30, 1980
The right of eminent domain must not be exercised capriciously or arbitrarily.
(2) ‘Eminent Domain’ Distinguished from ‘Expropriation’
While eminent domain refers to the right, expropriation
usually refers to the procedure, thru which the right is exercised.
(See Rule 67, Rules of Court).
(3) Essential Requisites of Eminent Domain
(a)
taking by competent authority
(b)
observance of due process of law
(c)
taking for public use
(d)
payment of just compensation. (See Republic v. Juan,
L-24740, July 30, 1979).
153
Art. 435
CIVIL CODE OF THE PHILIPPINES
Republic v. La Orden De PP. Benedictinos
de Filipinas,
L-12792, Feb. 28, 1961
FACTS: The government wanted to expropriate part of
the land owned by the San Beda College on Mendiola Street to
solve alleged traffic congestion. Instead of filing an answer, the
college filed a motion to dismiss on the ground that the land “is
already devoted to public use and that there is no necessity for
the expropriation.’’ Without receiving evidence on the question
of fact involved, the trial court dismissed the expropriation case
on the ground of lack of extreme necessity.
HELD: The case should be remanded to the lower court for
the presentation of evidence on the facts in dispute, such as the
necessity for traffic relief. This is because courts have the power
to inquire into the legality of the proceedings and to verify the
existence of the legal requisites for the exercise of the right of
eminent domain.
[NOTE: The collection by the owner of the land to be
expropriated, of the amount deposited by the Government as
provisional value of the land is a recognition not merely of the
Government’s right to take possession of the land, which is
perfected upon the making of such deposit, unless the Court
fixes another amount as to the provisional value thereof, but
also, of the compliance with the condition precedent, and thus
renders such right, effective and executory. (Rep. of the Phils.
v. Pasicolan, et al., L-17365, May 31, 1961).].
Santos v. Director of Lands
22 Phil. 424
FACTS: A landowner wanted a Torrens Title for his land,
but in the registration proceedings in court, the Director of
Lands opposed the petition, alleging that a certain portion of
the land was essential for the proposed widening of a road.
ISSUE: Is the opposition tenable?
HELD: No, the opposition is without merit and is therefore
untenable. Later the government can ask for expropriation, but
in the meantime, the landowner must not be deprived of his
rights over the land.
154
CIVIL CODE OF THE PHILIPPINES
Art. 435
Ayala de Roxas v. City of Manila
9 Phil. 215
FACTS: An owner of a land bordering an estero applied
for a license with which to construct a terrace on his land. The
City of Manila refused to give the license, on the theory that
a public easement of towpath was going to be established on
a portion of the land. The owner petitioned for a writ of mandamus. ISSUE: Will the writ be granted?
HELD: Yes, otherwise the landowner will be deprived of
his property without due process of law.
Pedro Arce and Carmen Barrica
de Arce v. Genato
L-40587, Feb. 27, 1976
FACTS: A CFI (now RTC) Judge, in an expropriation
case, allowed the condemner (the Municipality of Baliangao of
Misamis Oriental) to take (upon deposit with the PNB of an
amount equivalent to the assessed value of the property) immediate possession of a parcel of land (sought to be condemned
for the beautification of its town plaza). This was done without
a prior hearing to determine the necessity for the exercise of
eminent domain. Is the Judge allowed to do so?
HELD: Yes, the Judge is allowed to do so in view of Presidential Decree 42, issued on Nov. 9, 1972. PD 42 is entitled
“Authorizing the Plaintiff in Eminent Domain Proceedings to
take Possession of the Property Involved Upon Depositing the
Assessed Value for Purposes of Taxation.” Under said P.D.,
the deposit should be with the Philippine National Bank (in
its main office or any of its branches or agencies). The bank
will hold the deposit, subject to the orders and final disposition by the Court. Under the Decree, there is no need of prior
showing of necessity for the condemnation. The City of Manila
v. Arellano Law Colleges (85 Phil. 663), which enunciated the
contrary doctrine is no longer controlling. The old doctrine
requiring prior showing of necessity was the antiquarian view
of Blackstone with its sanctification of the right to one’s estate.
155
Art. 435
CIVIL CODE OF THE PHILIPPINES
The present (1987) Constitution pays little heed to the claims
of property.
(4) Competent Authority
(a)
Authority as of right — the State.
(b)
Authority by virtue of a grant — persons or corporations
offering public services.
More specifically, the following are examples of competent
authority:
(a)
National Government (thru the President of the Philippines) (CA 20 as amended by CA 260).
(b)
City of Manila (thru the Municipal Board with the Mayor’s
approval) (Rep. Act 267).
(c)
Provinces (thru the Provincial Board, with the approval of
the Executive Secretary of the President) (See Sec. 2106[f],
Revised Adm. Code).
(d)
Municipalities (thru the municipal councils with the approval of the Executive Secretary of the President) (See
Sec. 2245[b], Revised Adm. Code).
(e)
Other public corporations (thru the Board of Directors,
provided there is prior government approval) (See Act
1459, par. 86[1]).
(f)
The Manila Railroad Co. (Act 1510, Sec. 1, par. 26, as
amended by Act 2373; see also MRR v. Hacienda Benito,
37 O.G. 1957).
[NOTE: The right to expropriate is not an inherent
power in a municipal corporation, and before it can exercise the right, some law must exist conferring the power
upon it. If a law grants it, whether wisely or not, it must
be given effect, provided that all other requirements of the
law are complied with. (City of Manila v. Chinese Community, 40 Phil. 349). The validity of a statute directing
the expropriation of certain property is a judicial question.
(NARRA v. Francisco, L-14111, Oct. 24, 1960).].
156
CIVIL CODE OF THE PHILIPPINES
Art. 435
(5) Due Process of Law
(a)
Under the Constitution, no person may be deprived of
property without due process of law. (Art. III, Sec. 1,
1987 Constitution). In connection with expropriation, it
has been held that there is due process of law when there
has been a substantial compliance with the procedure laid
down under Rule 69 — Expropriation — of the Rules of
Court (now Rule 67). (See Visayan Refining Co. v. Camus,
40 Phil. 550). In other words, there must be proper expropriation proceedings. (Santos v. Director of Lands, 22
Phil. 424). Such proceedings must include:
1)
a notice to the owner of the property;
2)
a full opportunity to present his side on whether or
not the purpose of the taking is public; or whether or
not the government reasonably needs the property;
3)
and such other procedural requisites as may be prescribed under the law. (Black, Constitutional Law;
see also Secs. 1-14, Rule 67, Rules of Court).
[NOTE: The mere notice of the intention of the
state to expropriate the land in the future cannot
prevent the landowner from alienating the property,
for after all, the condemnation proceedings may not
even be instituted. Moreover, even while proceedings
have already begun, it is possible that a sale to a
person willing to assume the risk of expropriation
may be considered valid. (Rep. v. Baylosis, 61 O.G.
722).].
(b)
Strict construction: Whenever an entity is granted the
right to expropriate, the grant must be strictly construed,
and when the right is sought to expropriate private property that is not really needed, the right should be denied.
(See Manila Railroad Co. v. Hacienda Benito, 37 O.G.
1957).
(c)
Estoppel: It is true that before there can be expropriation, there must first be instituted proper proceedings
in court. Therefore, an entity can be held liable for damages for unlawful trespass if the proper procedure has
157
Art. 435
CIVIL CODE OF THE PHILIPPINES
not been first resorted to. (See City of Manila v. Chinese
Community, 40 Phil. 349). But the ruling will not apply
if the owner of the property is guilty of estoppel, i.e., if
he allowed the entity to make use of the land, and incur
expenses thereon without making any objection to the
unauthorized taking. In such a case, he cannot complain
against the expropriation, although of course, he would
still be entitled to just compensation for the land, inasmuch as he can no longer recover the same. (See Manila
Railroad Co. v. Paredes, 32 Phil. 534). Moreover, he will
have to be paid not only for the part of the land actually
taken, but also for the remaining portions, if by virtue of
the improvements introduced thereon by the entity, the
remaining land has become useless for him. (See Tenorio
v. Manila Railroad Co., 22 Phil. 411).
(d)
Confiscation abolished: There is a distinction between
expropriation (which requires due process of law), and
confiscation (which does away with due process, and
where no compensation is given). Confiscation has long
been abolished by modern fundamental laws. Thus, if a
revolutionary government confiscates the properties of a
private individual, the properties cannot be considered
owned by the confiscator. To decide otherwise would be
to promote the interest of those who would foment public
disorder. (Endencia v. Lualhati, 9 Phil. 177).
(e)
Abandonment of proceedings: When in the course of the
expropriation proceedings it is realized that there is no
more need for the property sought, it is permissible to
abandon the proceedings, but the landowner must be
indemnified for all losses or prejudice caused him, in
case the land had been in the meantime possessed by the
plaintiff. (City of Manila v. Ruyman, 37 Phil. 421).
(6) Public Use
(a)
As to what exactly is public use insofar as eminent domain
is concerned may be difficult to determine. The character
of the entity or agency employed is not a sufficient basis
from which to conclude the presence or absence of a “public use.” If indeed the use be public, it does not matter
158
CIVIL CODE OF THE PHILIPPINES
Art. 435
that the entity exercising the right be private. Upon the
other hand, just because the agency is public does not
necessarily follow that the purpose is also public. (See
Perry v. Keene, 46 N.H. 514).
(b)
Question of fact: The question as to whether or not any
specific or particular use is a public one is ultimately a
judicial question. Of course, if Congress has specifically
allowed expropriation of realty for a designated or specified public purpose, the courts of justice are not allowed
to inquire into the necessity of such purpose. If, however,
the grant has been merely a general one, that is, authority
to expropriate land for public use, courts have jurisdiction to decide whether the taking is indeed for a public
use. In such case, the issue is a question of fact, and the
Court should inquire into and hear proof upon the question. Thus, if an owner successfully proves that an actual
taking of his property serves no public use, or that the
property is already devoted to or intended to be devoted
to ANOTHER public use, courts are allowed to deny the
expropriation of said property. (City of Manila v. Chinese
Community of Manila, et al., 40 Phil. 349).
(c)
Doctrine of Reasonable Necessity
Absolute necessity for expropriation is not required;
all that is needed is a reasonable necessity for the public
use intended. (Manila Railroad Co. v. Mitchell, 50 Phil.
832).
(d)
Samples of Public Uses
Private property may validly be expropriated for the
following uses or purposes:
1)
market sites and market stalls (Municipality of Albay v. Benito, 43 Phil. 576);
2)
military and aviation purposes (Visayan Refining
Company v. Camus, 50 Phil. 550);
3)
roads, streets, public buildings including schoolhouses, cemeteries, artesian wells (See Malcolm, Phil.
Const. Law, 374, see also Santos v. Director of Lands,
22 Phil. 424, which held that if the government needs
159
Art. 435
CIVIL CODE OF THE PHILIPPINES
private land to widen an existing road, the proper
remedy is not seizure but expropriation);
4)
land needed by railroad companies for their railroad.
(Sena v. Manila Railroad, 42 Phil. 102). Moreover,
not only may the land actually and presently needed
be expropriated, but also those that are adjacent
thereto and may be used in the near future in connection with the railroad. This is because we have
to consider the growth and future need of the enterprise. (Manila Railroad Co. v. Mitchell, 50 Phil. 832).
A railroad is a public necessity, indispensable to the
economic and material development of the country.
(Sena v. Manila Railroad Co., supra).
[NOTE: While Congress may authorize the devoting of land from one public use to another, a city
is not so authorized. Thus, a city cannot order that a
cemetery (devoted to public use) be used instead as
a public street. The rule is this: when a cemetery is
open to the public, it is of public use, and no part of
the ground can be taken for other public use under a
mere general authority of eminent domain. (See City
of Manila v. Chinese Community, 40 Phil. 349).].
Republic of the Philippines v.
Philippine Long Distance Telephone Co.
L-18841, Jan. 27, 1969
FACTS: The Philippine Government, thru the
Bureau of Telecommunications, wanted to enter into a
contract with the Philippine Long Distance Telephone Co.
(PLDT) (a sequestered private firm), whereby the latter
would allow the Bureau of Telecommunications (thru the
Government Telephone System) to send to or receive from
other countries telephone calls (thru certain trunk lines of
the PLDT). When the PLDT refused on the ground that its
own facilities were inadequate and on the further ground
that the Government Telephone System was competing
with it (the PLDT), the Government sued to compel the
PLDT to enter into a contract with it on the matter.
Issue: May the PLDT be compelled to enter into such
a contract?
160
CIVIL CODE OF THE PHILIPPINES
Art. 435
HELD: Strictly speaking, the PLDT cannot be compelled to enter into such a contract, in the absence of any
previous agreement thereon. This is because freedom to
stipulate terms and contracts is of the essence of our
contractual system. As a matter of fact, in case of vitiated
consent — such as intimidation or undue influence — a
contract may properly be annulled. BUT, in the exercise
of eminent domain, the desired interconnection can be
required upon payment of just compensation, in view of
the public service or use contemplated. Normally, expropriation deals with a transfer of title or ownership; there
is nothing wrong therefore in imposing a burden less than
a transfer of title. For instance, it is unquestionable that
real property may thru expropriation be subject to an
easement of right of way. If under Sec. 6, Art. XIII of the
Constitution (now Sec. 18, Art. XII, 1987 Constitution),
the state may in the interest of national welfare, transfer
utilities to public ownership upon payment of just compensation, there is no reason why the state may not require
a public utility to render services in the general interest,
provided just compensation is paid therefor. (The case
was thus remanded to the lower court for determination
of the “just compensation.”)
[NOTE: On the point that the Government Telephone
System should not be allowed to expand its facilities
because in its original prospectus, it was stated that the
service would be limited to government offices, the Court
ruled that the Government is of error on the part of its
agents. (Pineda v. CFI of Tayabas, 52 Phil. 803; Benguet
Consolidated Mining Co. v. Pineda, 98 Phil. 711). Moreover, it is a well-known rule that erroneous application and
enforcement of the law by public officers will not block
subsequent correct application of the statute. (PLDT v.
Coll. of Int. Revenue, 90 Phil. 676).].
Philippine Columbian Association v. Panis
46 SCAD 1002
(1993)
Public use now includes the broader notion of indirect
public benefit or advantage, including in particular, urban
land reform and housing.
161
Art. 435
CIVIL CODE OF THE PHILIPPINES
(7) Payment of ‘Just Compensation’
(a)
Meaning of “Just Compensation”
In eminent domain proceedings, just compensation means a fair and full equivalent value of the loss
sustained. (MRR v. Velasquez, 32 Phil. 286). Indeed, it
must be “just” not only to the individual whose property
is taken, but also to the public which is to pay for it. (Rep.
v. Lara, 50 O.G. 5778). More specifically, it is the market
value (the price that the property will bring when it is
offered for sale by one who desires, but is not obliged to
sell it, and is bought by one who is under no necessity of
having it) PLUS the consequential damages, if any, MINUS the consequential benefits, if any. (City of Manila v.
Corrales, 32 Phil. 85; MRR v. Velasquez, supra). However,
the incidental or consequential benefits may be set off only
against the consequential damages, and not against the
basic value of the property taken. Otherwise, there is a
possibility that the property may be taken without any
compensation at all, when it is alleged for instance that
the consequential benefits are equal to or greater than
the consequential damages and basic value combined.
Thus, the law expressly provides that “in no case shall the
consequential benefits assessed exceed the consequential
damages assessed, or the owner be deprived of the actual
value of his property so taken.” (Sec. 6, Rule 67, Rules of
Court).
[Example: If the market value is P1 million, the
consequential damages amount to P500,000, and the
consequential benefits are valued at P1.5 million, how
much should be the “just compensation’’?
ANS.: Following the formula stated in the case of
MRR v. Velasquez (supra), the answer would be P1 million + P500,000 – P1.5 million equals ZERO. But as has
been stated, this is not the proper solution for the benefits
should be set off only against the damages. Therefore,
the correct solution is P1 million + P500,000 – P500,000
equals P1 million. This is because the consequential
benefits considered should not exceed the consequential
damages.].
162
CIVIL CODE OF THE PHILIPPINES
Art. 435
In recent years, however, a new concept of just
compensation in eminent domain has developed, having
in mind the “social value” of property.
Meralco v. Pineda
206 SCRA 196
(1992)
In an expropriation case such as this one, where the
principal issue is the determination of just compensation,
a trial before the Commissioners is indispensable to allow the parties to present evidence on the issue of just
compensation.
The findings of the Commissioners may be disregarded and the court may substitute its own estimate of
the value. The latter may do so only for valid reasons. For
that matter, the trial with the aid of the Commissioners
is a substantial right that may not be done away with
capriciously or for no reason at all.
Thus, the respondent judge’s act of determining
and ordering the payment of just compensation without
the assistance of a Board of Commissioners, is a flagrant
violation of petitioner’s constitutional right to due process
and is a gross violation of the mandated rule established
by the Rules of Court.
Napocor v. Angas
208 SCRA 542
(1992)
The determination of just compensation in eminent
domain cases is a JUDICIAL FUNCTION. Thus, 6% per
annum is the correct and valid legal interest allowed in
payments of just compensation for land expropriated for
public use.
B.H. Berkentkotter & Co. v. CA
216 SCRA 584
(1992)
Just compensation is to be ascertained as of the time
of the taking, which usually coincides with the commence163
Art. 435
CIVIL CODE OF THE PHILIPPINES
ment of the expropriation proceedings. But where the
institution of the action precedes entry into the property,
the just compensation is to be ascertained as of the time
of the filing of the complaint.
The Court is not bound by the Commissioner’s report.
Province of Camarines Sur v. CA
41 SCAD 389
(1993)
Presidential Decrees fixing the just compensation in
expropriation cases to be the value given to the condemned
property either by the owners or the assessor, whichever
was lower, have been declared unconstitutional.
Land Bank v. CA
71 SCAD 806
GR 118712, July 5, 1996
The concept of “just compensation’’ embraces not
only the correct determination of the amount to be paid
to the owners of the land, but also the payment of the
land within a reasonable time from its taking “and not
being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss.’’
[NOTE: In eminent domain or expropriation proceedings,
the general rule is that the just compensation to which the
owner of condemned property is entitled to is the market value.
Just compensation is determined by the nature of the land at
the time of taking. Thus, in National Power Corp. v. Chiong
(404 SCRA 527 {2003}), it was held the “duty of the court (to)
consider the Commissioner’s Report to satisfy itself that just
compensation will be made to the defendant by its final judgment [o]n the matter.’’].
[NOTE: Interest at the rate of 12% per annum is imposed
on the amount of payment of “just compensation’’ still due in
order to help eliminate the issue of constant fluctuation and
inflation of the value of the currency over time. (Reyes v. National Housing Authority, 395 SCRA 494 {2003}).].
164
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 435
Evidence of the Market Value
Standing alone, the following do not constitute sufficient evidence of the market value:
1)
the rental value as the basis. (City of Manila v. Corrales, 32 Phil. 85).
2)
the assessed value. (Tenorio v. MRR Co., 22 Phil.
411; Republic v. Urtula, L-16028, Nov. 29, 1960).
3)
what a testifying witness would demand for his
property under the same conditions. (See MRR v.
Mitchell, 49 Phil. 801).
4)
deeds of sales of property in the same community.
(MRR v. Fabie, 17 Phil. 206).
All of these factors must be taken into consideration,
particularly sales in an open, free, and fair market of properties under identical or similar circumstances, such as
location and time of sale. (See City of Manila v. Estrada,
25 Phil. 208; Macondray & Co. v. Sellner, 33 Phil. 370;
City of Manila v. Neal, 33 Phil. 291; MRR v. Fabie, 17
Phil. 208). In order that purchases and sales of properties
may be considered competent proof of the market value
of the expropriated property, the former must be shown
to be adjoining the latter, or at least, within the zone of
commercial activity with which the condemned property
is identified. (Republic v. Yaptinchay, et al., L-13684, July
26, 1960). While the owner’s valuation of the property may
not in law be binding on the government or the courts, it
should at least set a ceiling price for the compensation to
be awarded. The price of the condemned property should
not be higher than what the owner demanded. (Ibid.; see
also Rep. v. Narciso, L-6594, May 18, 1956). Moreover,
the owner of the property taken has a right to its value
for the use of which it would bring the most in an open
market. (City of Manila v. Corrales, 32 Phil. 85).
Among the factors that may also affect the amount
of just compensation are the topographical features of
the land, permanent improvements thereon, and ready
accessibility to the streets and roads in the vicinity. It
165
Art. 435
CIVIL CODE OF THE PHILIPPINES
must be remembered also that interest on the amount
must be given from the time the plaintiff takes possession of the property. (Republic v. Gonzales, et al., L-4918,
May 14, 1954). However, neither the sentimental value of
the property to its owner nor the inconvenience resulting
from the loss thereof is an element in the determination
of damages. (Republic v. Lara, L-5080, Nov. 29, 1954;
Republic v. Yaptinchay, et al., L-13684, July 26, 1960).
Upon the other hand, the valuation fixed by the provincial assessor cannot be deemed binding on the landowner
where the latter did NOT intervene in fixing it. The assessment must be based on the owner’s estimate so as to
make it binding upon him. Thus, the bare opinion of the
Provincial Appraisal Committee (experts who had not
been confronted or cross-examined by the landowner) is
not by itself adequate to overthrow that of the expropriation commissioners, especially if the records do not reveal
HOW the committee arrived at the values set in their
appraisal. (Republic v. Urtula, L-16028, Nov. 29, 1960).
Today, the basic evidence of the true market value
is that which is declared by the Provincial or City Assessor, or that declared by the taxpayer himself, whichever
is LOWER. This is to penalize taxpayers who deliberately
give a low valuation so that the real estate tax which
he will have to pay is also low. However, as already discussed, the consequential damages and benefits will still
have to be ascertained, otherwise the just compensation
referred to in the Constitution can be rendered nugatory.
(c)
Value at Taking or Value at Filing of Complaint
Ordinarily, inquiry is limited to the actual market value at the time of the filing of the condemnation
proceedings because under normal circumstances, the
filing of the complaint coincides with and even precedes
the taking of property sought to be expropriated. Where
however the actual taking or occupation by the plaintiff,
with the consent of the landowner long precedes the filing
of the complaint for expropriation, the rule to be followed
is that the value of the property should be fixed as of the
166
CIVIL CODE OF THE PHILIPPINES
Art. 435
date when it was taken, and not the date of the filing of
the proceeding. (Republic v. Lara, et al., L-5080, Nov. 29,
1954). In one case, the government expropriated certain
real estate on Taft Avenue. Because of such expropriation, the real estate value on that portion of Taft Avenue
increased. The owner then demanded that he be paid
the new enhanced value. It was held that the government should pay the value of the land at the time it was
taken, since this value is the true measure of damages.
Otherwise, this would discourage the construction of important public improvements. (Provincial Gov’t. of Rizal
v. Caro de Araullo, 58 Phil. 308). If private agricultural
lands are taken by the Japanese, converted by the latter
into commercial or residential lands, and subsequently
expropriated by the Philippine Government, the government must pay for them as agricultural lands, and not
as commercial or residential lands for what the owner
really lost were agricultural lands. (Rep. v. Garcellano,
et al., L-19556 and L-12630, Mar. 29, 1958). The value
indeed should be determined by, among other factors, its
character at the time of the taking, and not as a “potential
building site.” (Rep. v. Garcellano, Ibid.).
[NOTE: By way of summary, we may state that the
value should be that existing:
At the time of the TAKING or at the time of the
FILING of the cases, whichever comes first. (Republic v.
Phil. National Bank, et al., L-14158, Apr. 12, 1961).].
Commissioner of Public Highways v. Burgos
L-34230, Mar. 31, 1980
The just compensation in eminent domain refers
to the value of the property at the time of taking, not its
value at a subsequent time. Art. 1250 of the Civil Code
which refers to extraordinary inflation or deflation applies
only to payments by virtue of a contract, not payment on
account of expropriation proceedings.
Under the present law, the taking of the property can
be asked of the courts, and will generally be granted as
167
Art. 435
CIVIL CODE OF THE PHILIPPINES
long as 10% of the market value (discussed hereinabove)
is properly deposited. (See PDs 42, 76, 1259, and 1313).
BUT this taking of property can be declared improper,
and the property itself will be returned to the owner if it
is ruled that there is NO NECESSITY for the expropriation of the particular property taken, and that another
property would fulfill better, the public need. (De Knecht
v. Hon. Bautista, GR 51078, Oct. 30, 1980).
(d)
Speculative Benefits
In one case, the Manila Railroad Company expropriated a parcel of land near a railroad station. The owner
of the land, aside from asking for its actual value, wanted
a larger sum, because according to him, the place was
suitable for a hotel site, which would give him great income.
HELD: He must be paid only the value of the land at
the time of taking. The possibility of the construction of a
hotel is merely speculative and should not be considered.
(Manila Railroad Co. v. Mitchell, 49 Phil. 801).
In another case, the expropriator wanted some
amount deducted from that to be given to the owners of
the land, on the ground that consequential benefits would
arise because “the lot is going to be commercial, and probably the cost of the land there would not be less than P50
per square meter.” This statement was made by one, part
of whose land was being expropriated, the rest continuing
to remain his. On the issue whether or not the probable
increase in land value should be considered, the Supreme
Court —
HELD: This probable increase must not be considered. The consequential benefits which may be set off
against the damages where part of a tract of land is taken
by virtue of the right of eminent domain are those accruing to the residue of the tract from the construction of the
improvement. They must be actual and appreciable, and
not merely conjectural; and they must be the direct and
proximate result of the improvement, remote benefits not
being taken into consideration. The amount sought was
168
CIVIL CODE OF THE PHILIPPINES
Art. 435
therefore not deducted. (Republic v. Valera, et al., L-5776,
Apr. 14, 1954).
In Municipal Gov’t. of Sagay v. Jison, et al.,
L-10484, Dec. 29, 1958, it was held that if the lot was
agricultural when the government assumed possession,
the adaptability thereof for conversion in the future into
a residential site does not affect its nature although it is
a circumstance that should be considered in determining
its value at that time as an agricultural land.
(e)
Cost of Improving Expropriated Property
The cost of improving expropriated property must
be borne by the plaintiff-expropriator. Said cost must
therefore not be deducted from the price that should be
paid. (See City of Manila v. Corrales, 32 Phil. 85).
(f)
Incidental or Consequential Damages
Example of incidental or consequential damages
which should be reimbursed as part of “just compensation”
are:
1)
injuries to adjoining portions of the land
2)
demolition or destruction of buildings or houses
on the land. (Mun. of Tarlac v. Besa, 55 Phil.
432; MRR v. Velasquez, 32 Phil. 286).
3)
depreciation caused to the remaining property.
(Manila Electric Co. v. Tuason, 60 Phil. 286).
[NOTE: It has been held that a landlord is not responsible for his tenant’s eviction through condemnation
proceedings, and cannot be held liable therefor. The tenant must look to the plaintiff-expropriator for his compensation. (Sayo v. Manila Railroad Co. and Archbishop
of Manila, 43 Phil. 551).].
Republic v. Lara, et al.
L-5080, Nov. 29, 1954
FACTS: X owned a parcel of land which the Japanese took over during the occupation and over which they
169
Art. 435
CIVIL CODE OF THE PHILIPPINES
built a concrete airstrip, runway, and taxiway. If the
government desires to expropriate the land, must these
improvements be paid to the owner?
HELD: No, because said improvements really belong
to the Republic which as victor in the last war should be
considered as the legitimate successor to the properties
owned by the Japanese in the Philippines. It is wrong to
say that the Japanese army was a possessor in bad faith,
and that therefore constructions by them belong to the
owner of the land by industrial accession. This is because
in the first place, the rules of the Civil Code concerning
industrial accession are not designed to regulate relations
between private persons and a sovereign belligerent, nor
intended to apply to construction made exclusively for
prosecuting a war, when military necessity is temporarily
paramount. In the second place, international law allows
the temporary use by the enemy occupant of private land
and buildings for all kinds of purposes demanded by necessities of war.
(g)
Is the Government Compelled to Pay Interest?
In the case of Philippine Executive Commission v.
Estacio (L-7260, Jan. 21, 1956), the Supreme Court held
that the owner of land expropriated by the government is
entitled to recover legal interest on the amount awarded
from the time the state takes possession of the land. This
is so even if the law has no provision concerning said legal
interest. (Of course if a part of the price had already been
paid, interest would be only on the balance.) Furthermore,
in computing interest, to the value of the land must also
be added the value of the crops which had to be destroyed
by the government. (See also Republic v. Gonzales, et al.,
L-4918, May 14, 1954, where the obligation to pay interest was also stressed). In Republic v. Garcellano, et al.
(L-9556 and L-12630, Mar. 28, 1958), the court reiterated
the rule that legal interest, and not rentals should be
paid. The Court added that since the owners are allowed
such interest, they should bear the land taxes and any
registration or cadastral fees required from the date of the
taking up to the filing of the expropriation proceedings. In
170
CIVIL CODE OF THE PHILIPPINES
Art. 435
Manila Railroad Co. v. Alano (36 Phil. 500), it was held
that when a decision on expropriation forgets to provide
for interest, but becomes final, no award of interest can
be granted.
Commissioner of Public Highways v. Burgos
L-34230, Mar. 31, 1980
If the final judgment in an expropriation case orders
the payment of interest computed from the filing of the
complaint (and not from the taking of the property by the
government), this order is now the law of the case and
must be complied with.
(h)
Payment of Costs for Expropriation Proceedings
Inasmuch as expropriation proceedings are involuntary in nature (since demanded as of right by the state)
the Rules of Court provides that “all costs, except those
of rival claimants litigating their claims shall be paid by
the plaintiff, unless an appeal is taken by the owner and
the judgment is affirmed, in which event, the costs of the
appeal shall be made by the owner.’’ (Sec. 12, Rule 67,
Rules of Court). But the defendant in an expropriation
case cannot recover attorney’s fees as part of the costs
unless specifically authorized by the statute. (Tomten v.
Thomas, 232 Pzd. 723 [1953]).
(i)
Mere Passing of Ordinance Cannot Defeat Right to Compensation
An ordinance prohibiting the construction of a building on private land on the ground that said land would
be used for a public street is invalid as an exercise of the
right of eminent domain, unless there be due process of
law and payment of just compensation. (Clemente, et al. v.
Mun. Board, et al., L-8633, Apr. 27, 1956). The claim for
compensation may prescribe. (Jaen v. Agregado, L-7921,
Sep. 28, 1955).
(j)
The Taking of Local Waterworks Systems
The exercise by the NAWASA (now MWSS) of its
jurisdiction, supervision, and control over the local wa171
Art. 435
CIVIL CODE OF THE PHILIPPINES
terworks system without paying just compensation to the
municipal corporations concerned would be detrimental to
their rights of dominion over their respective waterworks
systems. Republic Act 1383 (which empowers the NAWASA [now MWSS] to take over local waterworks systems) is
unconstitutional insofar as the lack of just compensation
is concerned. (City of Baguio v. NAWASA, 106 Phil. 144;
Municipality of San Juan v. NAWASA, L-22047, Aug. 31,
1967; NAWASA v. Hon. Minerva I. Piguing, L-25573, Oct.
11, 1968).
(k)
Rule if Government Does Not Pay
Here, suit may be brought against the Auditor
General, if payment is refused by him. (Ministerio v. CFI
of Cebu, 40 SCRA 464, cited in Santiago v. Republic, 87
SCRA 294, L-48214, Dec. 19, 1978).
(8) Effects of Expropriation on the Ownership of the Property Expropriated
Among the effects of expropriation on the ownership of
the property are the following:
(a)
Ownership (except the right to occupy or possess) is
transferred only when payment of just compensation with
proper interest has been made. (Jacinto v. Dir. of Lands,
49 Phil. 583).
(b)
While it is true that under the law (Art. 435), among other
things, payment of just compensation must first be made
before possession or occupation may even be transferred
— otherwise the court shall restore the owner in his possession — still, in some instances, as in emergencies, the
government may immediately get the property, occupy
and possess it, and pay for the property later, but if this
happens, the government should reimburse the former
owner for the taxes that the latter may have paid for the
real properties. These are the taxes due from the time
the property was taken till said property is compensated
for. (City of Manila v. Roxas, 60 Phil. 215). This is true
even if it is a fact that title does not pass till payment is
given. (Calvo v. Zandueta, 49 Phil. 605).
172
CIVIL CODE OF THE PHILIPPINES
Art. 435
(c)
If the property expropriated is no longer needed for the
public use it was originally intended, does ownership revert to the former owner? It depends. If the judgment gave
full ownership to the plaintiff, he remains the owner even
after the need has disappeared. If, however, the grant had
been conditional, that is, that ownership would revert to
the original owner, said condition is a valid one. (See Fery
v. Mun. of Cabanatuan, 42 Phil. 28).
(d)
Expropriation transfers ownership over all kinds of properties whether real or personal, tangible or intangible.
(See Metropolitan Water District v. Director of Lands, 57
Phil. 293).
[NOTE: An expropriation suit excludes recovery of
a sum of money dealing with the exercise by the Government of its authority and right to take property for public
use because it is incapable of pecuniary estimation and
should be filed with the regional trial courts (RTCs).
(Bardillon v. Barangay Masili of Calamba, Laguna, 402
SCRA 440 {2003}).].
(9) Extraordinary Expropriation
While ordinary expropriation refers to a taking for public
use, extraordinary expropriation is allowed under our 1987
Constitution for private use (Art. III, Sec. 9) (although, of
course, even here there is a connotation of public use), i.e., for
the benefit of certain individuals under the conditions provided
therein. Thus, Art. XIII, Sec. 4 provides:
“The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof.
To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment
of just compensation. In determining retention limits,
173
Art. 435
CIVIL CODE OF THE PHILIPPINES
the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary
land-sharing.’’
[NOTE: The COST mentioned in the above Constitutional
provision is not only the purchase price which the Government
pays to owners of landed estates, but also the cost of administration and of its eventual sale to tenants and occupants, not
more, but not less. (See Javillonar v. Land Tenure Administration, L-10303, Aug. 22, 1958).].
[NOTE: In connection with the condemnation proceedings
authorized by Rep. Act 1400, Congress did not intend to give
the landowner the power to choose either what portion shall
be expropriated or what portion shall be exempted from expropriation. Initially, the parties are expected to try to reach an
agreement if they can, on the area to be expropriated and/or
the area to be excluded from the expropriation proceedings;
and in the event of disagreement, the courts of justice should
settle the issue in accordance with the demands of justice,
equity and fair play. (Land Tenure Administration v. Ascue,
et al., L-14969, Apr. 29, 1961).].
[NOTE: The Supreme Court has consistently held that
the rule requiring previous exhaustion of administrative
remedies before resorting to the courts applies only (in land
cases) to controversies arising out of the disposition of disposable public lands, and NOT to cases involving land that was
originally owned by private parties and later was acquired by
the Government for the purpose of reselling them to bona fide
tenants or occupants. (Marukot v. Jacinto, L-8036-38, Dec. 20,
1955; Geukeko v. Araneta, L-10182, Dec. 24, 1957; Lemos v.
Castañeda, et al., L-16287, Oct. 27, 1961).].
(10) Purpose of Extraordinary Expropriation
Art. XIII, Sec. 4 of the 1987 Constitution has for its purpose not mere equality in the owning of lands but the championing of the cause of social justice to the end that public welfare
will be enhanced. (See Guido v. Rural Progress Administration,
L-2089, Oct. 31, 1949).
[NOTE: The choice or discretion to sell private lands acquired by the government through purchase or expropriation,
174
CIVIL CODE OF THE PHILIPPINES
Art. 435
under either Sec. 1 or Sec. 10 of Com. Act No. 539, is with
the President of the Philippines whose choice, once exercised
becomes final and binding on the government. Should the
President therefore give the land to a province for the establishment of a vocational school, instead of for distribution to the
landless, this would be perfectly all right, for the government
is also required to promote the education of our youth. (Juat,
et al. v. Land Tenure Administration, et al., L-17080, Jan. 28,
1961).].
[NOTE: The President of the Philippines is allowed to sell
to provinces, cities, and municipalities portions of expropriated
landed estate (sufficient in size and conveniently located) for
public plazas, streets, markets, cemeteries, schools, municipal
and other public buildings. (Juat v. Land Tenure Administration, L-17080, Jan. 28, 1961, 1 SCRA 361). The purpose is to
promote public policy and this would include the education of
the youth. (Ibid.)].
(11) Lands Covered by Extraordinary Expropriation
In the leading case of Guido v. Rural Progress Administration, supra, and reiterated in the case of Urban Estates, Inc. v.
Montesa, L-3830, the Supreme Court held that only big landed
estates were contemplated by CA 539 which in turn is based
on Art. XIII, Sec. 4 of the 1987 Constitution. In another case,
the Court also held that even small estates may be expropriated, provided that a serious social problem or conflict exists
therein. (Rural Progress Adm. v. Reyes, L-4703, Oct. 8, 1953).
In the case of Republic v. Gabriel (L-6161, May 26, 1954), the
Court reiterated and quoted the ruling in the Montesa case:
“The Constitution contemplates large scale purchase
or condemnation of lands with a view to agrarian reforms
and the alleviation of acute housing shortage.
“Condemnation of private lands in make-shift or
piece-meal fashion, random taking of a small lot here,
and a small lot there to accommodate a few tenants or
squatters is a different thing. This is true, be the land
urban or agricultural.
“The first (large-scale) sacrifices the rights and interests of one or a few for the good of all; the second is a
175
Art. 435
CIVIL CODE OF THE PHILIPPINES
deprivation of a citizen of his property for the convenience
of another citizen or a few other citizens without perceptible benefit to the public. The first carries the connotation
of public use; the last follows along the lines of a faith or
ideology alien to the institution of property.’’
[NOTE: In this case of Gabriel, the property being expropriated was only 41,671 square meters, so that the court held
that “such property can hardly be considered landed estate
within the purview of the Constitution,’’ hence, expropriation
was denied.]
[NOTE: In Prov. of Rizal v. Bartolome San Diego, Inc. (L10802, Jan. 22, 1959), it was held that tenancy trouble alone,
whether due to the fault of the tenants or of the landowners
does not justify expropriation. (See also NARRA v. Francisco,
L-14111, Oct. 24, 1960).].
Republic of the Phils.
v. Hon. Numeriano G. Estenzo, et al.
L-24656, Sep. 25, 1968
FACTS: Under Sec. 154(3) of the Land Reform Code (Republic Act 3844) enacted on August 8, 1963, “expropriation proceedings instituted by the Land Tenure Administration pending
in the Court of First Instance (now Regional Trial Court) at
the time of the effectivity of this Code, shall be transferred
and continued in the respective Courts of Agrarian Relations
...” Now then, suppose the expropriation case had already
been decided, by the CFI (now RTC) before the effectivity of
the Land Reform Code, can the decision of the said CFI (now
RTC) be successfully assailed as having been rendered without
jurisdiction?
HELD: The CFI (now RTC) certainly had jurisdiction since
the Land Reform Code would not be applicable. Note that the
case was not a pending one; it had already been decided.
[NOTE: The Land Reform Code has been replaced by the
Comprehensive Agrarian Reform Law (CARL).].
176
CIVIL CODE OF THE PHILIPPINES
Art. 435
(12) Effect of Grouping Together the Shares of Small Landowners
A lot which measures less than four hectares belonging to
nine owners is not a landed estate for expropriation purposes.
Grouping the nine persons together or suing them as a corporation does not conceal the resultant 4,375 square meters for
each only. It would certainly be unfair to implead nine owners
of small adjacent lands and then allege that they own a large
estate which can be expropriated. (Mun. of Caloocan v. Manotok
Realty, Inc., L-6444, May 14, 1954; NARRA v. Francisco, et al.,
L-14111, Oct. 24, 1960).
(13) Ability of Tenants to Cultivate
To avail of the benefits of Com. Act 539, which allows
expropriation of big landed estates for sale to the tenants, the
tenants must themselves be able to cultivate by themselves the
land sought to be expropriated, otherwise, if it is impractical to
do this, expropriation would not be allowed. (Rep. v. Castro, et
al., L-4370, Feb. 25, 1955). The order of preference for the lots
is as follows: first, to bona fide tenants; second, to the occupants;
and last, to private individuals. But this order of preference
should be observed only if the parties affected stand on an
equal footing, or under equal circumstances. The order need
not be rigidly followed, when a party, say a bona fide tenant,
has already in his name, other lots. Incidentally, a tenant need
not be in actual physical possession of the land in order to be
considered bona fide within the meaning of the law. A person
who holds the leasehold right over the property may also be
called a tenant even if the material possession thereof is held
by another. (Gutierrez v. Santos, et al., L-12253, Mar. 28, 1960).
A bona fide tenant ceases to be one if he is NOT up-to-date in
the payment of his rentals. His delinquency makes him lose
his preferred status. (Juat v. Land Tenure Administration,
L-17080, Jan. 28, 1961). Even if the word “occupant’’ is not
preceded by the phrase “bona fide,’’ it is understood that good
faith on the part of the beneficiaries is intended as a requirement unless the law expressly provides the contrary. Therefore,
a squatter or a person guilty of illegal entry cannot be deemed
a beneficiary under Com. Acts 20 and 539, nor of Rep. Act 1162.
(Republic v. Vda. de Caliwan, L-16927, May 31, 1961).
177
Art. 435
CIVIL CODE OF THE PHILIPPINES
(14) Effect of Sale of Landed Estate Before Government Has
Expropriated It
If before a big landed estate has been expropriated, it is
sold by the owner to a third person, the tenants of the land
should vacate the same. This is so, even if said tenants had
been working for the expropriation of the land in order that
it may be sold to them at cost and in small parcels. The important thing is that the land had not yet been expropriated.
(Lucio Lopez v. Elias de la Cruz, L-6274; Espiritu v. Rodriguez,
L-6486, Mar. 11, 1954). In Province of Rizal v. Bartolome San
Diego, Inc., et al., L-10802, Jan. 22, 1959, it was held that
mere notice of the intention of the Government to expropriate
a parcel of land does not bind either the land or the owner so
as to prevent subsequent disposition of the property such as
mortgaging or even selling it in whole or by subdivision. (See
also Rep. v. Baylosis, et al., 51 O.G. 739). To bind the land to
be expropriated and the owner thereof, the expropriation must
be actually commenced in Court, and even then, the owner may
mortgage or sell the land if he can find persons who would step
into his shoes and deal with the Government. (Tuason v. De
Asis, et al., L-11319-20, 13507-8, 13504, Feb. 29, 1960). The
suspension of an ejectment proceeding should only be made
after the Government has taken steps relative to the expropriation of the property in accordance with the procedure laid
down by law, otherwise, the action would place the interest of
the landlord in jeopardy. (Ibid.; see also Teresa Realty, Inc. v.
State Construction and Supply Co., L-10883, Mar. 25, 1959).
Indeed, Rep. Act 1162, as amended by Rep. Act 1599, about
the suspension of proceedings for ejectment of tenants, has NO
application to a case where expropriation proceedings have not
commenced. (Teresa Realty, Inc. v. Potenciano, L-17588, May
30, 1962; Teresa Realty, Inc. v. Garriz, L-14717, July 31, 1962).
Moreover, the mere filing of the condemnation proceedings for
the benefit of the tenants cannot by itself alone, lawfully suspend the condemnee’s dominical rights, whether of possession,
enjoyment, or disposition. Thus, the owner may still enforce
final and executory judgments against the actual occupants
of the property. The rule would of course be different if the
government has already taken possession of the property by
178
CIVIL CODE OF THE PHILIPPINES
Art. 435
depositing in court its provisional value. (J.M. Tuason and Co.
v. Court of Appeals, L-18128, 18672, Dec. 26, 1961).
(15) Interest of Education Superior to Interest of a Few Tenants
In one case, the City of Manila, invoking Sec. 1 of Rep. Act
267 (authorizing cities to purchase lands for subdivision and
resale to the tenants) wanted to expropriate several parcels of
land owned by the Arellano Law College, so as to subdivide and
resell to tenants who have erected their houses thereon. The
question was whether or not expropriation would prosper.
HELD: Expropriation will not prosper for the following
reasons:
(a)
First, ordinary expropriation is not the remedy, for
the purpose is not a public one.
(b)
Secondly, even granting the purpose to be public,
still the alleged public purpose (of benefiting some
tenants) fades into insignificance in comparison with
the preparation of young men and women for useful
citizenship and eventual governmental service.
(c)
Thirdly, extraordinary expropriation would not prosper because the persons occupying the site are not
bona fide tenants thereof.
(d)
Fourthly, the land is small (7,270 sq.m.), or just one
third of the land involved in the Guido case.
(e)
Fifthly, what the law authorized was a purchase, not
an expropriation; and even granting that extraordinary expropriation was allowed, same would be
unconstitutional for the land is small. (City of Manila
v. Arellano Law College, L-2929, Feb. 28, 1950, 47
O.G. 4197).
(16) Difference Between ‘Sale’ and ‘Expropriation’
A sale is voluntary; expropriation is involuntary. So if an
owner is willing to sell his property to the government, and the
price is mutually agreed upon, the transaction is a sale, and
179
Art. 435
CIVIL CODE OF THE PHILIPPINES
it is not essential to institute condemnation proceedings. (See
Noble v. City of Manila, 38 O.G. 2770).
(17) Power of Eminent Domain Superior to the Constitutional
Clause Prohibiting the Infringement of Contracts
If A and B enter into a contract of sale, with the provision
that the government cannot expropriate the property, may the
State still institute condemnation proceedings? The answer is
in the affirmative, for it has been held that the existence of
a contract between parties cannot prevent expropriation just
because the obligation of contracts would be impaired. (Long
Island Water Supply Co. v. Brooklyn, 166 U.S. 685). However,
when the Government is itself a party to the contract of sale (as
when the government had leased or purchased the property)
it cannot afterwards repudiate the contract it had voluntarily
entered into, and then institute expropriation proceedings.
(Noble v. City of Manila, supra).
Vicente Noble v. City of Manila
38 O.G. 2770
The City of Manila leased A’s building for three years,
with a provision that at the end of the stated period, the City
would buy the building at an agreed price. At the end of the
lease, the City wanted to cancel the contract, and to instead
resort to expropriation proceedings.
HELD: The City cannot cancel its contract or agreement
to buy the land. “Expropriation lies only when it is made necessary by the opposition of the owner to the sale, or by the lack of
any agreement as to the price. There being in the present case
a valid and subsisting contract between the owner of the building and the city, for the purchase thereof at an agreed price,
there is no reason for the expropriation ... In the circumstances
of the present case (instead of enhancing public welfare), the
expropriation would depart from its own purposes and turn out
to be an instrument to repudiate compliance with obligations
legally and validly contracted.”
[NOTE: Suppose in the above-given case, it had been the
owner of the building who had changed his mind, and would no
180
CIVIL CODE OF THE PHILIPPINES
Art. 435
longer proceed with the sale, would expropriation now be the
proper remedy? NO. The remedy should be the enforcement of
the contract.].
(18) Propriety of Expropriation when Ownership Is Disputed
While it is true that ordinarily, expropriation can prosper when there are rival claimants to the condemned property, still if it is alleged that a foreign corporation owns the
land (acquired after the effective date of the Constitution),
expropriation by the Government is not the proper remedy,
for expropriation presupposes ownership over the land by the
defendant. It is inconsistent to recognize and at the same
time deny ownership of title of the person to the property
sought to be expropriated. Any hearing and valuation of the
property held by virtue of such authorized proceedings should
be considered null and void and therefore should be set aside.
(Mun. of Caloocan v. Chian Huat & Co., L-6301, Oct. 30, 1954).
However, if a Filipino sells his land to a Chinese citizen, and
the latter alienates it in favor of another Filipino, to whom a
new transfer certificate of title has been issued, the validity of
such title can be questioned no longer. (Natividad Herrera, et
al. v. Luy Kim Guan, et al., L-17043, Jan. 31, 1961). If on the
other hand, the land is still in the hands of the Chinese buyer,
the Filipino who had sold it to him will NOT be allowed to get
back the land, even if he should offer to return the purchase
price. A violation of the Constitution should logically leave the
offenders without recourse against each other. (Soriano v. Ong
Hoo, L-10931, May 28, 1958).
Estanislao Alfonso v. Pasay City
L-12754, Jan. 30, 1960
FACTS: Alfonso’s land, protected by a Torrens Title,
was taken by Pasay City for road purposes, without expropriation proceedings, and without compensation. The taking
was in 1925. Alfonso now asks for its return (plus rent) or for
its present market value. Pasay City pleads prescription and
laches.
181
Art. 435
CIVIL CODE OF THE PHILIPPINES
HELD: There can be no prescription because of the Torrens Title. However, restoration of the land is now neither
convenient or feasible because it is now a public road. Therefore, Alfonso is merely entitled to the value of the lot (not the
present market value, but the value at the time of taking) plus
interest (in lieu of rentals) from time of taking to time of payment. Pasay City should also pay attorney’s fees.
(19) No ‘Res Judicata’ With Respect to Damages
Inasmuch as the only issue involved in the decision denying plaintiff’s right to expropriate the land of defendants, is
the propriety or impropriety of said expropriation the latter’s
right to damages not having been litigated therein, said decision cannot be res judicata as to the matter of damages. (Rep.
v. Baylosis, L-13582, Sep. 30, 1960).
Note: The doctrine of res judicata applies to both judicial
and quasi-judicial proceedings. The doctrine actually embraces
2 concepts: the first is bar by prior judgment under paragraph
(b) of Rule 39, Section 47, and the second is conclusiveness of
judgment under paragraph (c) thereof. In the present case, the
second concept — conclusiveness of judgment — applies. The
said concept is explained in this manner: “A fact or question
which was an issue in a former suit and was there judicially
passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as
the parties to that action and persons in privity with them are
concerned and cannot be again litigated in any future action
between such parties or their privies, in the same court or any
other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed
by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter
in another action between the same parties or their privies,
it is essential that the issue be identical. If a particular point
of question is in issue in the second action, and the judgment
will depend on the determination of that particular point or
question, a former judgment between the same parties or their
privies will be final and conclusive in the second if that same
point or question was in issue and adjudicated in the first suit.’’
(Ocho v. Carlos, GR 137908, Nov. 22, 2000).
182
CIVIL CODE OF THE PHILIPPINES
Art. 435
(20) Two Stages in Expropriation
Cases:
NAPOCOR v. Hon. Enrique T. Joison, et al.
GR 94193-99, Feb. 25, 1992
Respondent Judge committed grave abuse of discretion
amounting to lack of jurisdiction, and is otherwise either unmindful or ignorant of the law when he fixed the provisional
values of the properties for the purpose of issuing a writ of possession on the basis of the market value and the daily opportunity profit petitioner may derive in violation or in disregard of
PD 42; in amending such determination in Civil Cases 5938 and
5939 by increasing the same without hearing; in directing the
defendants to manifest within twenty-four (24) hours whether
or not they are accepting and withdrawing the amounts representing the provisional values deposited by the plaintiff for
each of them as “final and full satisfaction of the value of their
respective property;’’ in declaring the provisional values as the
final values and directing the release of the amounts deposited,
in full satisfaction thereof, to the defendants even if not all of
them made the manifestation; and in suspending the issuance
of the writ of possession until after the amounts shall have
been released to and received by defendants.
In Municipality of Biñan v. Hon. Jose Mar Garcia, et al.
(180 SCRA 576 [1989]), this court ruled that there are two (2)
stages in every action of expropriation:
“The first is concerned with the determination of the
authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of
the facts involved in the suit. It ends with an order, if not
of dismissal of the action, ‘of condemnation declaring that
the plaintiff has a lawful right to take the property sought
to be condemned, for the public use or purpose described in
the complaint, upon the payment of just compensation to
be determined as of the date of the filing of the complaint.’
An order of dismissal, if this be ordained, would be a final
one, of course, since it finally disposes of the action and
183
Art. 435
CIVIL CODE OF THE PHILIPPINES
leaves nothing more to be done by the Court on the merits.
So, too, would an order of condemnation be a final one, for
thereafter as the Rules expressly state, in the proceedings
before the Trial Court, ‘no objection to the exercise of the
right of condemnation (or the propriety thereof) shall be
filed or heard.’
The second phase of the eminent domain action is concerned with the determination by the Court of the just compensation by the property sought to be taken. This is done
by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners
would be final, too. It would finally dispose of the second stage
of the suit, and leave nothing more to be done by the Court
regarding the issue.’’
However, upon the filing of the complain or at any time
thereafter, the petitioner has the right to take or enter upon
the possession of the property involved upon compliance with
PD 42 which requires the petitioner, after due notice to the
defendant, to deposit with the Philippine National Bank in
its main office or any of its main office or any of its branches
agencies, “an amount equivalent to the assessed value of the
property for purposes of taxation.’’ This assessed value is that
indicated in the tax declaration.
PD 42 repealed the “provisions of Rule 67 of the Rules
of Court* and of any other existing law contrary to or inconsistent’’ with it. Accordingly, it repealed Section 2 of Rule 67
insofar as the determination of the provisional value, the form
of payment and the agency with which the deposit shall be
made, are concerned. Said section reads in full as follows:
“SECTION 2. Entry of plaintiff upon depositing value
with National or Provincial Treasurer. — Upon the filing
of the complaint or at any time thereafter, the plaintiff
shall have the right to take or enter upon the possession
of the real or personal property involved if he deposits
with the National or Provincial Treasurer its value, as
*Sec. 2, Rule 67 has been amended by the 1997 Rules of Civil Procedure.
184
CIVIL CODE OF THE PHILIPPINES
Art. 435
provisionally and promptly ascertained and fixed by the
court having jurisdiction of the proceedings, to be held by
such treasurer subject to the orders and final disposition
of the court. Such deposit shall be in money, unless in lieu
thereof the court authorizes the deposit of a certificate
of deposit of a depository of the Republic of the Philippines payable on demand to the National or Provincial
Treasurer, as the case may be, in the amount directed
by the court to be deposited. After such deposit is made
the court shall order the sheriff or other proper officer to
forthwith place the plaintiff in possession of the property
involved.’’
It will be noted that under the aforequoted section, the
court has the discretion to determine the provisional value
which must be deposited by the plaintiff to enable it “to take
or enter upon the possession of the property.’’ Notice to the
parties is not indispensable. In interpreting a similar provision
of Act 1592, this Court, in the 1915 case of Manila Railroad
Company, et al. v. Paredes, et al. (31 Phil. 118), held:
“The statute directs that, at the very outset, ‘when
condemnation proceedings are brought by any railway
corporation’ the amount of the deposit is to be ‘provisionally and promptly ascertained and fixed by the court.’ It
is very clear that it was not the intention of the legislator that before the order fixing the amount of the deposit
could lawfully be entered, the court should finally and
definitely determine who are the true owners of the land;
and after doing so, give them a hearing as to its value,
and assess the true value of the land accordingly. In effect,
that would amount to a denial of the right of possession
of the lands involved until the conclusion of the proceedings, when there would be no need for the filing of the
deposit. Of course, there is nothing in the statute which
denies the right of the judge to hear all persons claiming
an interest in the land, and courts should ordinarily give
all such persons an opportunity to be heard if that be
practicable, and will cause no delay in the prompt and
provisional ascertainment of the value of the land. But
the scope and extent of the inquiry is left wholly in the
185
Art. 435
CIVIL CODE OF THE PHILIPPINES
discretion of the court, and a failure to hear the owners
and claimants of the land, who may or may not be known
at the time of the entry of the order, in no wise affects
the validity of the order.’’
PD 42, however, effectively removes the discretion of
the court in determining the provisional value. What is to be
deposited is an amount equivalent to the assessed value for
taxation purposes. No hearing is required for that purpose. All
that is needed is notice to the owner of the property sought
to be condemned. Clearly, therefore, respondent Judge either
deliberately disregarded PD 42 or was totally unaware of its
existence and the cases applying the same.
In the case at bar, respondent Judge issued the July 16,
1990 Order directing the defendants to state in writing within
twenty-four (24) hours whether or not they would accept and
withdraw the amounts deposited by the petitioner for each of
them “as final and full satisfaction of the value of their respective property (sic) affected by the expropriation’’ and stating
at the same time that the writ of possession will be issued
after such manifestation and acceptance, and receipt of the
amounts.
The above Order has absolutely no legal basis even as
it also unjustly, oppressively and capriciously compels the
petitioner to accept the respondent Judge’s determination of
the provisional value as the just compensation after the defendants shall have manifested their conformity thereto. He
thus subordinated his own judgment to that of the defendant’s
because he made the latter the final authority to determine
such just compensation. This court ruled in Export Processing
Zone Authority v. Dulay, et al. (149 SCRA 305 [1987]) that the
determination of just compensation in eminent domain cases
is a judicial function; accordingly, We declared as unconstitutional and void, for being, inter alia, impermissible encroachment on judicial prerogative which tends to render the Court
inutile in a matter which, under the Constitution, is reserved
to it for final determination, the method of ascertaining just
compensation prescribed in PDs 76, 464, 794 and 1533; to wit:
the market value as declared by the owner or administrator or
such market value as determined by the assessor, whichever is
186
CIVIL CODE OF THE PHILIPPINES
Art. 435
lower in the first three (3) decrees, and the value declared by
the owner or administrator or anyone having legal interest in
the property or the value as determined by the assessor, pursuant to the Real Property Tax Code, whichever is lower, prior to
the recommendation or decision of the appropriate Government
office to acquire the property, in the last mentioned decree. If
the legislature or the executive department cannot even impose
upon the court how just compensation should be determined, it
would be far more objectionable and impermissible for respondent Judge to grant the defendants in an eminent domain case
such power and authority.
Without perhaps intending it to be so, there is not only
a clear case of abdication of judicial prerogative, but also a
complete disregard by respondent Judge of the provisions of
Rule 67 as to the procedure to be followed after the petitioner
has deposited the provisional value of the property. It must
be recalled that three (3) sets of defendants filed motions to
dismiss pursuant to Section 3, Rule 67 of the Rules of Court;
Section 4 of the same rule provides that the court must rule on
them and in the event that it overrules the motions or, when
any party fails to present a defense as required in Section 3,
it should enter an order of condemnation declaring that the
petitioner has a lawful right to take the property sought to be
condemned.
Reyes v. National Housing Authority
395 SCRA 494
(2003)
In this instant controversy, the Supreme Court asseverated the following, thus:
1.
it is now settled doctrine that the concept of public use
is no longer limited to traditional purposes — the idea
that “public use’’ is strictly limited to clear cases of “use
by the public’’ has been abandoned and the term has not
been held to be synonymous with “public interest,’’ “public
benefit,’’ “public welfare,’’ and “public convenience;’’
2.
expropriation of private lands for slum clearance and
urban development is for a public purpose even if the
187
Art. 435
CIVIL CODE OF THE PHILIPPINES
developed area is later sold to private homeowners, commercial firms, entertainment and service companies, and
other private concerns;
3.
the expropriation of private property for the purpose of
socialized housing for the marginalized sector is in furtherance of the social justice provision under Sec. 1, Art.
XIII of the 1987 Philippine Constitution;
4.
when land has been acquired for public use in fee simple
unconditionally, either by the exercise of eminent domain
or by purchase, the former owner retains no rights in the
land, and the public use may be abandoned, or the land
may be abandoned, or the land may be devoted to a different use without any impairment of the estate or title
acquired, or any reversion to the former owner; and
5.
it is a recognized rule that although the right to enter
upon and appropriate the land to public use is compelled
prices to payment, title to the property expropriated shall
pass from the owner to the expropriation only upon full
payment of the just compensation.
(21) Urban Land Reform
Pablo Nidoy v. CA and Charles Ang
GR 105017, Sep. 30, 1992
Clearly, the right of first refusal applies only to tenants
who have resided for ten (10) years or more on the leased land
declared as within the Urban Land Reform Zone, and who have
built their homes on that land. It does not apply to apartment
dwellers. Petitioner, who rents one of the units in the apartment
building, is merely an apartment dweller although the land is
within the Urban Land Reform Zone. Moreover, the right of first
refusal may only be exercised by the legitimate tenants, and
petitioner having ceased to be a bona fide tenant cannot avail
himself of the benefits of PD 1517, as amended.
Petitioner’s contention that he cannot be evicted or dispossessed of the leased land even if he does not enjoy the right of
first refusal under PD 2016, the amendatory decree of the “Urban Land Reform Act,’’ is not well taken. True, Sec. 2 thereof
188
CIVIL CODE OF THE PHILIPPINES
Art. 435
provides that “no tenant or occupant family, residing for ten
years or more x x x in land proclaimed as Areas for Priority
Development x x x shall be evicted from the land or otherwise
dispossessed.’’ However, the benefits of this amendatory decree
extend only to legitimate tenants who have been leasing the
land on which they have constructed their homes for ten (10)
years or more from 11 June 1978 (date of effectivity of PD 1517)
in land proclaimed as an Area for Priority Development; it does
not extend to apartment dwellers such as herein petitioner.
The rationale for the rule on non-eviction is to preclude
unscrupulous landowners from demanding a steep price for
the land from their tenants with the view of evicting the latter
should they fail to exercise their right of first refusal. PD 2016
seeks to prevent the landowners from resorting to this ploy. The
“Whereas Clauses’’ of the law are enlightening —
xxxx
“WHEREAS, notwithstanding the above-mentioned
presidential issuances relating to the institution of urban
land reform and its implementing machinery, resident
families in Areas for Priority Development or Urban Land
Reform Zones are being evicted from such land in violation
of Section 6 of the Urban Land Reform Law which provides that qualified families within Urban Land Reform
Zone ‘shall not be dispossessed of the land and shall be
allowed the right of first refusal to purchase the same;
“WHEREAS, landowners of the above-cited land are
able to go around Section 6 of the Urban Land Reform Law
by offering to sell the land to occupant families at a very
high price which is beyond the occupant’s capacity to pay
and subsequently evicting them for failure to exercise their
option to buy the said land thus rendering the Urban Land
Reform Law inoperative and of no consequence.’’
National Housing Authority v. Allarde
115 SCAD 220, 318 SCRA 22
(1999)
As early as Apr. 26, 1971, the Tala Estate was reserved,
inter alia, under Presidential Proclamation No. 843, for the
189
Art. 435
CIVIL CODE OF THE PHILIPPINES
housing program of the National Housing Authority, the same
has been categorized as not being devoted to the agricultural
activity contemplated by Section 3(c) of Republic Act 6657,
and is, therefore, outside the coverage of the Comprehensive
Agrarian Reform Law.
Government projects involved for the various plants and
installations of the National Housing Corporation, for its future
expansion and for its staff and pilot housing development and
for housing, resettlement sites and other uses necessary and
related to an integrated social and economic development of the
entire estate and environs x x x are infrastructure projects.
(22) Instance When Any Transaction Entered Into By the
Municipality Involving the Land Is Governed By the
Applicable Civil Law
De Guzman v. Court of Appeals
504 SCRA 238 (2006)
After the municipality acquired ownership over the land
thru expropriation and passed the ordinance converting the
said land into a commercial area, any transaction entered into
by the municipality involving the land was governed by the
applicable civil law in relation to laws on local government.
As absolute owner of the land, the municipality is entitled
to devote the land for purposes it deems appropriate.
Lucero, Jr. v. City Government of Pasig
508 SCRA 23 (2006)
FACTS: The lease (and occupation) of a stall in a public
market is not a right but a purely –– statutory privilege governed by laws and ordinances. Issue: This, being the case, is
the operation of a market stall by virtue of a license subject to
the police power of the local government?
HELD: Yes. For a public market is one dedicated to the
service of the general public and operated under government
control and supervision as a public utility. After all, the operation of a public market and its facilities is imbued with public
interest is imbued with public interest.
190
CIVIL CODE OF THE PHILIPPINES
Art. 436
Art. 436. When any property is condemned or seized
by competent authority in the interest of health, safety or
security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure
is unjustified.
COMMENT:
(1) Seizure as an Exercise of Police Power
(a)
This article is based on police power, which in turn is
based on the maxim that “the welfare of the people is the
supreme law of the land.’’
(b)
Unlike eminent domain which requires the giving of just
compensation, police power needs no giving of a financial
return before it can be exercised. This is therefore one
instance when property may be seized or condemned by
the government without any financial compensation.
(c)
Police power can refer not merely to condemnation and
seizure, but also to total destruction itself, provided that
(a) the public interest is served and (b) the means used
are not unduly harsh, abusive, or oppressive. (See U.S. v.
Toribio, 15 Phil. 85). Thus, nuisances can be abated; and
rotting canned goods may be destroyed. If the condemnation, seizure, or destruction is unjustified, the owner is
entitled to compensation. (See Art. 436).
(2) Abatement of Nuisances
A State, in the exercise of police power, may abate nuisances, whether public or private, whether per se or per accidens. (See Homeowners’ Association of El Deposito v. Lood,
L-31864, Sep. 29, 1972).
[NOTE:
(a)
public nuisance — that which affects a community
or a considerable number of persons. (Art. 695).
(b)
private nuisance — that which is not public. (Art.
695).
191
Art. 436
CIVIL CODE OF THE PHILIPPINES
(c)
nuisance per se — that which is a nuisance under
all circumstances.
(d)
nuisance per accidens — that which is a nuisance
only under certain circumstances, like a factory,
situated in a residential district.].
City of Manila v. Gerardo
Garcia, et al.
L-26053, Feb. 21, 1967
FACTS: The City of Manila is the owner of parcels of land
forming one compact area in Malate, Manila. Shortly after liberation, several persons entered upon these premises without
the City’s knowledge and consent, built houses of second class
materials, and continued to live there till action was instituted
against them. In 1947, the presence of the squatters having
been discovered, they were then given by then Mayor Valeriano
Fugoso written permits each labelled as “lease contract.” For
their occupancy, they were charged nominal rentals. In 1961,
the premises were needed by the City to expand the Epifanio
de los Santos Elementary School. When after due notice the
squatters refused to vacate, this suit was instituted to recover
possession. Defense was that they were “tenants.”
HELD: They are squatters, not tenants. The mayor cannot legalize forcible entry into public property by the simple
expedient of giving permits, or for that matter, executing
leases. Squatting is unlawful and the grant of the permits
fosters moral decadence. The houses are public nuisances per
se and they can be summarily abated, even without the aid of
the courts. The squatters can, therefore, be ousted.
(3) Observance of Due Process
When the government exercises police power and issues
police regulations, the person concerned is not deprived of property without due process of law, provided, that the requisites of
the law are followed. (Tan Chat v. Mun. of Iloilo, 60 Phil. 465).
If a person buys a lot with a building thereon which has been
declared a fire hazard and which under the building permit
therefore was supposed to be REMOVED, he cannot prevent
192
CIVIL CODE OF THE PHILIPPINES
Art. 437
by injunction, the DEMOLITION of the fire hazard. He cannot
indeed say that he is being deprived of his property without
due process of law. (Verzosa v. City of Baguio, et al., L-13546,
Sep. 30, 1960).
(4) Sale of Fresh Meat Outside City Markets
The City of Manila has authority in the exercise of its
police power under the general welfare clause (RA 409, Sec.
18, par. KK) to enact an ordinance prohibiting the sale of fresh
meat outside the city markets. (Co Kiam, et al. v. City of Manila, et al., L-6762, Feb. 28, 1955).
(5) Houses on Streets
Houses constructed, without governmental authority,
on public streets and river beds, obstruct at all times the free
use by the public of said places, and accordingly constitute a
nuisance per se, aside from being a public nuisance. (Sitchon,
et al. v. Aquino, et al., L-8191; De la Cruz, et al. v. Aquino, et
al., L-8397, Feb. 27, 1956).
Art. 437. The owner of a parcel of land is the owner of
its surface and of everything under it, and he can construct
thereon any works or make any plantations and excavations
which he may deem proper, without detriment to servitudes
and subject to special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation.
COMMENT:
(1) Surface Right of a Land Owner
This article deals with the extent of ownership which a
person has over a parcel of land — more specifically, with what
is commonly referred to as “surface right.’’ Thus, if a person
owns a piece of land, it is understood that he also owns its surface, up to the boundaries of the land, with the right to make
thereon allowable constructions, plantings, and excavations,
subject to:
(a)
servitudes or easements
193
Art. 437
CIVIL CODE OF THE PHILIPPINES
(b)
special laws — like the Mining Law
(c)
ordinances
(d)
the reasonable requirements of aerial navigation
(e)
principles on human relations (justice, honesty, good faith)
and the prevention of injury to the rights of third persons.
(Arts. 19 and 431).
Example: unnecessary obstruction of the light and
view of a neighbor.
(2) Further Restriction on Surface Right
Surface right must also be restricted by the reasonable
requirements of underground shelters and depots with proper
state permission, as long as the surface right is not substantially disturbed. (If ownership does not extend ad coelum
— indefinitely upwards to the sky, it should not also extend
usque ad internos — indefinitely downwards). (Observations
on the new Civil Code, 15 Lawyer’s Journal, p. 499, Oct. 31,
1950). On this point, the Code Commission answered that a
special detailed law was needed on the points touched upon
by the Justice. (See Memorandum of the Code Com., Feb. 17,
1951, p. 2).
(3) Regalian Doctrine to be Observed
It is understood that the Regalian Doctrine (State ownership of mines and natural resources) stressed in the Constitution and implemented in the Mining Law, must be observed,
hence, mines discovered underneath the land should belong
to public dominion inasmuch as they are properties for the
development of our national wealth.
Republic v. CA
GR 43938, Apr. 15, 1988
The Regalian doctrine reserves to the State all natural
wealth that may be found in the bowels of the earth even if
the land where the discovery is made be private. Said doctrine
is intended for the benefit of the State, not of private persons.
The rule simply reserves to the State all minerals that may be
194
CIVIL CODE OF THE PHILIPPINES
Art. 438
found in public and even private land devoted to “agricultural,
industrial, commercial, residential or (for) any purpose other
than mining.” Thus, if a person is the owner of agricultural
land in which minerals are discovered, his ownership of such
land does not give him the right to extract or utilize the said
minerals without the permission of the State to which such
minerals belong.
Director of Lands Management Bureau v. CA
GR 112567, Feb. 7, 2000
120 SCAD 475
The Court cannot apply here the juris et de jure presumption that the lot being claimed by the private respondent ceased
to be a public land and has become private property.
To reiterate, under the Regalian Doctrine, all lands belong
to the State. Unless alienated in accordance with law, it retains
its basic rights over the same as dominus.
Art. 438. Hidden treasure belongs to the owner of the
land, building, or other property on which it is found.
Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and
by chance, one-half thereof shall be allowed to the finder.
If the finder is a trespasser, he shall not be entitled to any
share of the treasure.
If the things found be of interest to science or the arts,
the State may acquire them at their just price, which shall
be divided in conformity with the rule stated.
COMMENT:
(1) Where Hidden Treasure May Be Found
The treasure may be found on:
(a)
land
(b)
building
(c)
or other property.
195
Art. 438
CIVIL CODE OF THE PHILIPPINES
[NOTE: Under the old law (Art. 351 of the old Civil
Code), treasure could be found only on “land.”].
(2) Treasure Found on One’s Own Property
If X finds a hidden treasure in his house, he alone owns
the treasure. If he is married, the treasure belongs to the conjugal partnership. (Art. 154).
(3) Treasure Found on Another’s Property; Meaning of “By
Chance”
For the finder to be entitled to one-half, the discovery on
another’s property must be “by chance.” This means according
to Spanish commentators that there must be no purpose or
intent to look for the treasure. (2 Navarro Amandi 71). Dean
Francisco Capistrano and Dean Vicente Francisco are however,
of the opinion that the phrase “by chance” was intended by the
Code Commission to mean “by good luck,” implying that one who
intentionally looks for the treasure is embraced in the provision.
If, however, discovery is on another’s property, permission must
be sought, otherwise the finder will be considered a trespasser.
It would have avoided confusion had the Code Commission
therefor used the phrase “by good luck.” The author is of the
opinion that “by chance” really means “by good luck,” whether
there was a deliberate search for the treasure or not but there
was no prior agreement on how the treasure, if found, would be
divided. The reason is evident: it is extremely difficult to find
hidden treasure without looking for it deliberately, for in many
instances, the treasure is buried, that is, “hidden,” sometimes
many feet under the ground.
(4) Problem (Re: Permission Given To Look for Hidden
Treasure)
A, believing B’s land contained hidden treasure, asked B’s
permission to look for the treasure. B gave permission, and A
discovered the treasure. How much of the treasure should go
to A?
ANS.: Although there are conflicting opinions on this
point, it is believed that the treasure should be divided equally
between the finder and the owner even if the finding was the
196
CIVIL CODE OF THE PHILIPPINES
Art. 438
result of a deliberate hunt for the treasure. Equity demands
the equal sharing for it cannot be denied that had the landowner not given his permission, the treasure would not have
been found; and conversely, had there not been a seeker of the
treasure, same would not have been discovered. (See 3 Manresa
167). It would indeed be very presumptuous to conclude that
the landowner by giving permission, intended to renounce all
his rights. Moreover, by giving half to each party concerned,
we can more or less follow the intention of the Code Commission.
PROBLEM
X is the owner of a piece of land where hidden treasure
was believed to be buried. Y, who owns a mechanical device
used in detecting hidden treasure was given permission by X
to use the device on his land. Y discovered, after some effort,
jewelry and other precious objects which are not of interest
to science or the arts worth P5 million. To whom should the
treasure belong? Explain your answer.
ANS.: The treasure belongs to BOTH (50-50) because this
is still a case of finding by “chance,” defined as “good luck,” in
conformity with the intent of the Code Commission. This is so
even if the search for the treasure was clearly a deliberate one.
Firstly, it is difficult to find “hidden” treasure without a hunt
for it, for in many cases the same is buried many feet beneath
the earth. Secondly, what is the use of asking permission, if
after all the treasure would go, all of it, to the proprietor of
the land? Thirdly, permission is required, otherwise the finder
would generally be a trespasser, who gets NOTHING.
[NOTE: Sometime ago, there was the so-called “Golden
Buddha incident.” It is clear from the foregoing that the finder
as long as he sought permission, is entitled to one-half, even if
the search was deliberate.].
(5) Rule if Finder or Owner Is Married
The law provides that “the share of the hidden treasure
which the law awards to the finder or the proprietor belongs
to the conjugal partnership.” (Art. 154).
197
Art. 438
CIVIL CODE OF THE PHILIPPINES
Example:
A husband by chance discovered hidden treasure on the
land of his wife. Who owns the treasure?
ANS.: The half pertaining to the husband as finder belongs to the conjugal partnership. The half pertaining to the
wife as proprietor also belongs to the conjugal partnership. (See
Art. 154).
(6) Rights of a Usufructuary over the Hidden Treasure
Found on Land He Is Using
The law says: “With respect to hidden treasure which
may be found on the land or tenement, the usufructuary shall
be considered a stranger.” (Art. 566, Civil Code). What does
“stranger” mean? It simply means that the usufructuary, does
NOT get a share. If he found the treasure, he gets half as finder;
but if another person found it, such person gets half as finder,
and the naked owner gets the other half as owner. The same
rule applies to a tenant or lessee. (See 3 Manresa 158).
(7) If Finder Is a Paid Laborer of the Landowner
In the case of paid laborers, a distinction must be made.
If he really discovered the property by chance, he gets half. If
on the other hand, he had been employed precisely to look for
the treasure, he will get nothing insofar as the treasure is concerned. Of course, he will get his wages or salary. (3 Manresa
165-166). The rule is substantially the same in American law.
(25 C.J., p. 1138).
(8) Problem (Treasure Found Under Government Property)
If hidden treasure is found by chance under a municipal
plaza, who owns the treasure?
ANS.: Half goes to the finder and the other half to the
municipality. However, if the hidden treasure is scientifically
or artistically valuable, the finder’s half has to be given to the
municipality or state, who in turn will give him a just price
therefor. (Art. 438). The acquisition here by the municipality or
198
CIVIL CODE OF THE PHILIPPINES
Art. 439
by the state is a particular form of eminent domain or expropriation, hence, the procedure thereon should be substantially
followed.
(9) Trespasser
A trespasser (one prohibited to enter, or not given authority to enter) who discovers hidden treasure is not entitled to
any share of the treasure. If a person lawfully allowed to enter
discovers the treasure, but does not reveal the fact of discovery,
he does not thereby become a trespasser, in view of the permission to enter. Thus, he is entitled still to his share.
(10) Treasure Hunts
A treasure hunt is an express search for hidden treasure.
An owner of land may for example contract with a group of men
who would look for the treasure. Should discovery be made, the
actual finders will not necessarily be entitled to half. Instead,
they will be given what has been stipulated in the contract.
Art. 439. By treasure is understood, for legal purposes,
any hidden and unknown deposit of money, jewelry, or other
precious objects, the lawful ownership of which does not appear.
COMMENT:
(1) Requisites in the Definition of Hidden Treasure
(a)
Hidden and unknown deposit (such that finding it would
indeed be a discovery).
(b)
Consists of money, jewelry or other precious objects.
(c)
Their lawful ownership does not appear.
(2) Meaning of “Other Precious Objects’’
Following the doctrine of ejusdem generis — the phrase
“other precious objects” should be understood to refer to those
of the same class as money or jewelry, and should not therefore
include property imbedded in the soil, or part of the soil, like
minerals. (Goddard v. Winchell, 41 Am. St. Rep. 481). Immova199
Art. 439
CIVIL CODE OF THE PHILIPPINES
bles, like a tomb, would of course be excluded under the same
rule of ejusdem generis, but not the things found inside said
tomb, particularly those of interest to science or the arts. (See
Art. 438, 3rd par.; 3 Manresa 162-163). Incidentally, under
American law, the equivalent of “hidden treasure” is “treasure
trove.” (See Ferguson v. Rey, 44 Ore. 557).
(3) Lawful Ownership Must Not Appear
In one case, a legatee in a will inherited some books. Inside one of the books was found a wad of money bills. It was
proved that the books and the money had been used by the
testator. For this reason, it was held that the money did not
constitute hidden treasure, because its lawful ownership appeared. (TS, Tribunal Supremo or the Supreme Court of Spain,
Feb. 8, 1902).
(4) Precious Objects Deliberately Hidden
If deliberately hidden by the owner, precious objects cannot be considered hidden treasure even if discovered by another
as long as the true owner can prove his ownership. This is
because far from abandoning or renouncing his property, he
intended to return to it. Thus, said property, not being hidden
treasure, cannot indeed be acquired by “occupation,” one of the
modes of acquiring ownership, which includes within its scope
“hidden treasure.” If however, the true owner has forgotten
where he kept the same and has given up hope of ever recovering it, the object may now be appropriated by another since it
has already become “abandoned property.” If the true owner
has not yet abandoned the property, it is clear that same cannot
be acquired by “occupation” and cannot properly be considered
“hidden treasure.”
(5) Death of Lawful Owner
If the ownership of the treasure is known, but the owner
is already dead, same will not be considered “hidden treasure,”
and must therefore go to the owner’s rightful heirs. If the only
legal heir left is the state, the treasure will appertain to the
State’s patrimonial property. (See 5 Corpus Juris 1136).
200
CIVIL CODE OF THE PHILIPPINES
Chapter 2
RIGHT OF ACCESSION
GENERAL PROVISIONS
Art. 440. The ownership of property gives the right by
accession to everything which is produced thereby, or which
is incorporated or attached thereto, either naturally or artificially.
COMMENT:
(1) ‘Accession’ Defined
Accession is the right of a property owner to everything
which is:
(a)
produced thereby (accession discreta);
(b)
or which is incorporated or attached thereto, either
naturally or artificially (accession continua or accession non-interrumpida), which in turn is divided
into:
1)
natural accession (accession natural);
2)
artificial accession (accession artificial or accession industrial).
[NOTE: Because of the word “artificially,” it
is understood that IMPROVEMENTS made on the
property are included within the scope of “accession.”].
(2) Other Definitions of Accession
(a)
According to Sanchez Roman (Vol. II, p. 89)
Accession is the right of an owner of a thing to the
products of said thing as well as to whatever is inseparably attached thereto as an accessory.
201
Art. 440
(b)
CIVIL CODE OF THE PHILIPPINES
According to Stimson’s Law Dictionary, Revised Edition,
p. 58.
Accession is that by which property is given to a person in addition to what said person already possesses, said
additional property being the result of a natural increase,
like land, by deposit of a river; or houses, when built on
one’s own land; or the young of animals.
(c)
According to Del Viso, Vol. II, p. 33.
Accession is the right which ownership of property
gives over everything which the same produces, or which
is attached or incorporated thereto, naturally or artificially.
(3) Classification of Accession
(a)
Accession Discreta (To the Fruits)
1)
2)
3)
(b)
natural fruits
industrial fruits
civil fruits
Accession Continua (Attachment or Incorporation)
1)
With reference to real property
a)
accession industrial
(1)
(2)
(3)
b)
accession natural
(1)
(2)
(3)
(4)
2)
building
planting
sowing
alluvium
avulsion
change of course of rivers
formation of islands
With respect to personal property
a)
adjunction or conjunction
(1)
inclusion (engraftment)
(2)
soldadura (attachment)
202
CIVIL CODE OF THE PHILIPPINES
Art. 440
(3)
tejido (weaving)
(4)
pintura (painting)
(5)
escritura (writing)
(b)
mixture (confusion — liquids; commixtion
— solids)
(c)
specification.
(4) Is Accession a Mode of Acquiring Ownership?
In Book III of the Civil Code, which deals with “different
modes of acquiring ownership,’’ the different modes are enumerated, namely:
(a)
occupation
(b)
intellectual creation
(c)
law
(d)
donation
(e)
succession
(f)
tradition, as a consequence of certain contracts
(g)
prescription
It will be noted that accession is not one of those listed
therein. It is therefore safe to conclude that accession is not a
mode of acquiring ownership. The reason is simple: accession
presupposes a previously existing ownership by the owner over
the principal. This is not necessarily so in the other modes of
acquiring ownership. Therefore, fundamentally and in the last
analysis, accession is a right implicitly included in ownership,
without which it will have no basis or existence. Truly, it is
one of the attributes or characteristics which will make up the
concept of dominion or ownership. (Manresa, 6th Ed., Vol. 3, p.
116; 180-182). We can of course refer to acquisition by accession
as acquisition by LAW (for the law itself gives the right).
(5) Reason Behind Accession
(a)
for accession discreta (to the fruits) — justice, pure and
simple, for one who owns a thing should justly enjoy its
fruits;
203
Art. 441
(b)
CIVIL CODE OF THE PHILIPPINES
for accession continua (attachment or incorporation)
— economic convenience is better attained in a state
of single ownership than in a co-ownership. Moreover,
natural justice demands that the owner of the principal
or more important thing should also own the accessory.
(2 Castan 215-216).
(6) Right to Accession Generally Automatic
In general, the right to accession is automatic (ipso jure),
requiring no prior act on the part of the owner of the principal.
(Villanueva v. Claustro, 23 Phil. 54). A good example is in the
case of landowner over whose land a river now flows. He is
ipso facto the owner of the abandoned river bed in proportion
to the area he has lost. (See Art. 461).
Section 1. — RIGHT OF ACCESSION WITH
RESPECT TO WHAT IS PRODUCED BY PROPERTY
(ACCESSION DISCRETA)
Art. 441. To the owner belongs:
(1)
The natural fruits;
(2)
The industrial fruits;
(3)
The civil fruits.
COMMENT:
(1) Accession Discreta (Right to the Fruits)
This Article refers to accession discreta which is defined as
the right to the ownership of fruits produced by our property.
(See Del Viso, Vol. II, p. 33; 3 Sanchez Roman 89).
(2) Some Decided Cases and Doctrines
(a)
In an action to recover paraphernal property of the wife,
the intervention of the husband is not needed, and therefore the husband is not a necessary party. But if aside
from the paraphernal property, fruits therefrom are sought
204
CIVIL CODE OF THE PHILIPPINES
Art. 442
to be recovered, the husband must join in the action first
because he is a co-owner of said fruits (since they belong
to the conjugal partnership) and secondly because he is
the administrator of the conjugal partnership. (See Quizon
v. Salud, 12 Phil. 109).
(b)
In an action to recover a person’s property unlawfully in
the possession of another, damages may in part consist
of the value of the fruits produced. (See Quizon v. Salud,
Ibid.).
(c)
A tenant who continues on the land after expiration of the
lease contract and upon demand to vacate can be considered a possessor in bad faith and is responsible for the
fruits actually produced as well as those that could have
been produced by due diligence. It will be observed that
liability for the fruits is a consequence of the usurpation
and not because of a provision in the contract violated.
(See Guido v. Borja, 12 Phil. 718).
(3) Instances When Owner of Land Does Not Own the
Fruits
Under Art. 441, the owner of land owns the fruits. In the
following cases, it is not the owner who owns the fruits, but
somebody else:
(a)
possessor in good faith of the land (He owns the fruits
already received). (See Art. 544, par. 1).
(b)
usufructuary. (See Art. 566).
(c)
lessee gets the fruits of the land (Of course, the owner
gets the civil fruits in the form of rentals). (See Art.
1654).
(d)
In the contract of antichresis, the antichretic creditor
gets the fruits, although of course, said fruits should
be applied first, to the interest, if any is owing, and
then to the principal amount of the loan. (See Art.
2132).
Art. 442. Natural fruits are the spontaneous products of
the soil, and the young and other products of animals.
205
Art. 442
CIVIL CODE OF THE PHILIPPINES
Industrial fruits are those produced by lands of any kind
through cultivation or labor.
Civil fruits are the rents of buildings, the price of leases
of lands and other property and the amount of perpetual or
life annuities or other similar income.
COMMENT:
(1) Technical Meaning of ‘Fruits’
The term “natural,” “ndustrial,” and “civil fruits” as defined by the Code are highly technical, therefore when they are
found in a final judgment, there can be no doubt as to their
meaning. Thus, if a final judgment speaks only of natural and
civil fruits, it is understood that industrial fruits are NOT
included. (Pamintuan v. Garcia, 39 Phil. 746).
(2) Natural Fruits
There are two kinds of natural fruits:
(a)
the spontaneous products of the soil (that is, human labor
does not intervene).
Examples — herbs, common grass. (See 3 Manresa
182).
(b)
the young and other products of animals. (See Art. 442,
par. 1).
Examples — chicks and chicken eggs.
(3) Industrial Fruits
As defined, they are “those produced by lands of any kind
thru cultivation or labor.” (Art. 442, par. 2).
Examples:
(a)
lanzones and bananas
(b)
palay and corn
(c)
zacate (when this is cultivated as food for horses).
(See 3 Manresa 182-183).
206
CIVIL CODE OF THE PHILIPPINES
(d)
Art. 442
all kinds of cultivated vegetables, since these are no
doubt also produced by the land thru human labor
(but not canned goods or manufactured products). (3
Manresa 192-193).
[NOTE: Are the cultivated trees in themselves to be
considered fruits?
ANS.: It is submitted that strictly, they are not fruits
in the juridical sense for they are really immovables as
long as they are still attached to the land, which may
themselves produce fruits. However, there is no doubt we
may consider said trees as fruits when they are expressly
cultivated or exploited to carry on an industry. (See 3
Manresa 183).].
[NOTE: Under American law, distinction has been
made between:
a)
perennial crops (those growing each season without
need of replanting, like oranges and apples).
b)
annual crops (those which have to be planted each
year, like cereals and grains).
In America, (a) is referred to as natural fruits while
(b) is called industrial fruits. (See Walsh, The Law of
Property, pp. 14-15).].
(4) Young of Animals
Whether brought about by scientific means or not, it
would seem that the young of animals should be considered
as “natural” fruits, since the law makes no distinction.
(5) Meaning of ‘Other Products of Animals’
The phrase no doubt refers to such things as chicken eggs,
or horse manure, or milk, or wool.
(6) BAR Question (Re: Offspring of Animals)
To whom does the offspring of animals belong when the
male and female belong to different owners?
207
Art. 442
CIVIL CODE OF THE PHILIPPINES
ANS.: This point is not covered either by the old or the
new Civil Code. However, under the Partidas, the owner of the
female was considered also the owner of the young, unless there
is a contrary custom or speculation. (2 Navarro Amandi 276).
Moreover, in one case it was held that “the legal presumption,
in the absence of proof to the contrary, is that the calf, as well
as its mother belong to the owner of the latter, by the right of
accretion.” (U.S. v. Caballero, 25 Phil. 356). (See also Siari Valley Estate v. Lucasan, L-7046, Aug. 31, 1955). Commentators
opine that the rule of the Partidas may be applied under the
Codes because such rule merely continues the ownership which
the owner of the female possessed, when the young was still in
the womb of the mother. This is also in accord with the maxim
“pratus sequitor ventrem” (the offspring follows the dam — or
mother). (See 3 Sanchez Roman 139). This maxim is based on
two good reasons:
(a)
First, oftentimes, it is not known who the male is.
(b)
Second, during the pregnancy of the female, its
owner is greatly burdened by the consequential expenses and virtual uselessness of the animal, and it
is only fair that when the young is born, the owner
should gain, or at least recover his loss. (See Blackstone Comm. 390).
(7) Some Problems
(a)
A leased a female animal from B. During the period of
the lease, the animal produced a sibling. Who owns the
young (sibling)?
ANS.: A owns the young, for after all a contract of
lease is onerous. It should be observed that by virtue of
the contract of lease, the general rule that the owner of
the female is also the owner of the young must give way.
(See 3 Corpus Juris 22).
(b)
Suppose in the preceding problem, A was merely given
the animal by way of commodatum (gratuitous borrowing),
would your answer be the same?
ANS.: No. This time the owner of the female retains ownership in view of the gratuitous contract. (See Orser v. Stoems,
9 Cow [N.Y.] 687.).
208
CIVIL CODE OF THE PHILIPPINES
Art. 442
(8) Civil Fruits
As defined, civil fruits consist of:
(a)
rent of buildings;
(b)
price of leases (rentals) of lands and other property
(even if personal property);
(c)
the amount of perpetual or life annuities or other
similar income (but not a bonus granted as a reward
or as a compensation to a person who mortgaged and
thus risks his land to secure another’s indebtedness).
(See Bachrach Motor Co. v. Talisay-Silay Milling Co.,
56 Phil. 117).
In the case of Bachrach v. Seifert and Elianoff,
48 O.G. 569, it was held that a dividend, whether
in the form of cash or stock, is income or fruits, because it is declared out of the profits of a corporation,
and not out of the capital. (See also Orozco, et al. v.
Araneta, L-3691, Nov. 21, 1951).
(9) Cases
Bachrach Motor Co. v. Talisay-Silay Milling Co.
56 Phil. 117
FACTS: A milling company, in order to obtain a loan
from a bank, requested one of its sugar planters to mortgage
the latter’s land as security. As a reward, the company gave
the mortgagor a bonus. The bonus was later claimed by:
(a)
a creditor of the mortgagor;
(b)
the bank. (The bank reasoned out that as mortgagee, it was entitled to the fruits and that the bonus
should be considered as civil fruits).
HELD: The creditor of the mortgagor is entitled. In the
first place, a mortgagee is not entitled to the fruits of the land
mortgaged. In the second place, the bonus is not civil fruits. It
is not one of those meant by the law when it says “other similar
income” since this phrase refers merely to things analogous to
209
Art. 442
CIVIL CODE OF THE PHILIPPINES
rents, leases, and annuities. Assuming that it is income, still
it is not income obtained or derived from the land itself, but
income obtained as compensation for the risk assumed by the
owner. It should, moreover, be remembered that the bonus
was not based upon the value or importance of the land but
upon the total value of the debt secured. And this is something
distinct from and independent of the property mortgaged.
Wait v. Williams
5 Phil. 571
FACTS: From the 1st of a certain month to the 20th,
Regidor was entitled to the fruits of a certain property; and
from the 21st to the 30th of the same month, the Obras Pias
was entitled. The property was being rented. Who should get
the rentals?
HELD: The rentals for the first 20 days should belong to
Regidor; those for the last 10 days should go to the Obras Pias.
This is because civil fruits are deemed to accrue daily. (Art.
544).
Velayo v. Republic
L-7915, July 30, 1955
Unpaid charges for the use of government airports and
air navigation facilities are civil fruits that belong to the national government, as owner, and not to the Civil Aeronautics
Administration, which is only an instrumentality authorized
to collect the same.
The Overseas Bank of Manila v. Court of Appeals
L-49353, June 11, 1981
Banks are not required to pay interest on deposits for
the period during which they are not allowed to operate by the
Central Bank. This is demanded by fairness. However, interests that had accrued prior to the suspension should be paid
by the bank, for after all, it has made use then of the money
deposited.
210
CIVIL CODE OF THE PHILIPPINES
Art. 443
Art. 443. He who receives the fruits has the obligation
to pay the expenses made by a third person in their production, gathering, and preservation.
COMMENT:
(1) Duty of Recipient of Fruits to Reimburse Necessary
Expenses
Examples:
A is the owner of a piece of land upon which fruits were
grown, raised, harvested, and gathered by B in bad faith. Who
should be considered the owner of the fruits?
ANS.: A should be considered the owner of the fruits, since
he is the owner of the land, and B is a planter in bad faith but
he must reimburse B for the expenses for production, gathering,
and preservation. The reason for reimbursing B even though
he is in bad faith, is that were it not for the said necessary
cultivation expenses, there would not be any fruits grown at all,
or left or preserved. Thus, this article is merely in consonance
with the principle that no one may enrich himself unjustly at
another’s expense. (3 Manresa, pp. 181-183).
[NOTE: Under Art. 449, “He who builds, plants, or sows
in bad faith on the land of another, loses what is built, planted,
or sown without right to indemnity.” How can this Article 449
be reconciled with the answer to the example given above?
ANS.: Art. 449 applies only if the crops have not yet been
gathered (here the landowner gets the fruits without indemnity
by the principle of accession continua). On the other hand, Art.
443 applies when the crops have already been gathered (hence,
accession continua cannot apply). It should be observed that
in the example given, the crops were already gathered. (See
3 Manresa, pp. 187, 219-220; see also Dimson v. Rivera, {CA}
39 O.G. 1744). Thus, in one case, the possessor in bad faith
was ordered to return the fruits he had gathered “with a right
to deduct the expenses of planting and harvesting.” (Tacas v.
Tobon, 53 Phil. 356).].
211
Art. 444
CIVIL CODE OF THE PHILIPPINES
(2) Non-Applicability of Article When Planter is in Good
Faith
Art. 443 does not apply when the planter is in good
faith, because in this case, he is entitled to the fruits already
received, hence, there is no necessity of reimbursing him. (See
Art. 544).
(3) Characteristic of the Expenses Referred to in Art. 443
(a)
They must have been used for production, gathering, or
preservation, not for the improvement of the property.
(b)
They must have been necessary, and not luxurious or
excessive. Indeed, they must be commensurate with those
ordinarily necessitated by the product. (See 3 Manresa
187-188).
(4) Query
Suppose the expenses exceed the value of the fruits (as
when, for example, typhoons have damaged the crops) must
there still be a reimbursement for the expenses?
ANS.: Yes, if the owner insists on being entitled to the
fruits.
This is because:
(a)
the law makes no exception or distinction;
(b)
the same thing would have happened had the owner
been also the planter;
(c)
he who gets expected advantages must be prepared
to shoulder losses.
It is understood, of course, that if the fruits had not yet
been gathered, no indemnity is required. (See 3 Manresa 187188; Art. 449).
Art. 444. Only such as are manifest or born are considered as natural or industrial fruits.
With respect to animals, it is sufficient that they are in
the womb of the mother, although unborn.
212
CIVIL CODE OF THE PHILIPPINES
Art. 445
COMMENT:
(1) Two Kinds of Crops (Annual and Perennial)
Annual crops (like cereals, grains, rice, corn, sugar) are
deemed manifest (existing) the moment their seedlings appear
from the ground, although the grains have not yet actually
appeared.
Perennial crops (like oranges, apples, mangoes, and coconuts) are deemed to exist only when they actually appear
on the trees. (See 2 Manresa, p. 190; see also Walsh, Law of
Property, pp. 14-15).
(2) Animals
The young of animals are already considered existing even
if still in the maternal womb. (Art. 444, par. 2). But doubt may
arise whether they are already in the womb or not, so Manresa
suggests that they should be considered existing only at the
commencement of the maximum ordinary period of gestation.
(See 3 Manresa, pp. 190-191).
(3) Rules for Civil Fruits as Distinguished from Natural and
Industrial Fruits
(a)
Civil fruits accrue daily (Art. 544) and are therefore considered in the category of personal property; natural and
industrial fruits, while still growing, are real property.
(b)
Civil fruits can be pro-rated; natural and industrial fruits
ordinarily cannot. (See Art. 544).
Section 2. — RIGHT OF ACCESSION WITH RESPECT
TO IMMOVABLE PROPERTY
Art. 445. Whatever is built, planted or sown on the land
of another and the improvements or repairs made thereon,
belong to the owner of the land, subject to the provisions of
the following articles.
213
Art. 445
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Accession Industrial (Building, Planting, Sowing)
Art. 445 deals with accession continua; more specifically
with accession industrial. (BUILDING, PLANTING, SOWING)
— [NOTE: The difference between sowing and planting is that
in the former, each deposit of seed gives rise merely to a single
crop or harvest; whereas in planting, more or less permanent
trunks or trees are produced, which in turn produce fruits
themselves. In the latter case therefore, without a replanting,
crops will continue to grow every season.].
[NOTE: Art. 445 can, of course, be applied only if the
owner of the land is known. If he be unknown, no decision
on the ownership of the things planted, built or sown, can be
made. (See Binondo v. Mier, 34 Phil. 576).].
(2) Basic Principles of Accession Continua (Accession Industrial)
(a)
To the owner of the principal (the land for example) must
belong also the accessions, in accordance with the principle that “the accessory follows the principal’’ (“accesio
cedit principali’’).
(b)
The union or incorporation must, with certain exceptions,
be effected in such a manner that to separate the principal
from the accessory would result in substantial injury to
either.
(c)
He who is in good faith may be held responsible but he
should not be penalized.
(d)
He who is in bad faith may be penalized.
(e)
No one should enrich himself unjustly at the expense of
another.
(f)
Bad faith of one party neutralizes the bad faith of the
other so both should be considered in good faith.
214
CIVIL CODE OF THE PHILIPPINES
Art. 445
Crudo v. Mancilla
(CA) 37 O.G. 2089
If a landowner upon whose land grows a tree with
branches extending to the neighboring tenement, decides to
cut down the tree, and thus deprive his neighbor of whatever
advantages the branches afforded the neighbor (such as “for
shade purposes”), he is not required to pay his neighbor any
indemnity occasioned by the loss of the branches for he merely
cuts down what is his, by the principle of accession.
[NOTE: The only right which the neighbor has, in accordance with the law on easement, is to have the branches cut off
insofar as they extend over his property. (See Art. 680).].
(3) One Exception to the General Rule Enunciated in Art.
445 Whereby the Owner of the Land is also the Owner
of Whatever Is Built, Planted, or Sown Thereon
Under Art. 120 of the Family Code:
“Art. 120. The ownership of improvements, whether for
utility or adornment, made on the separate property of the
spouses at the expense of the partnership or through the acts
or efforts of either or both spouses shall pertain to the conjugal
partnership, or to the original owner-spouse, subject to the following rules:
When the costs of the improvement made by the conjugal
partnership and any resulting increase in value are more than
the value of the property at the time of the improvement, the
entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the
property of the owner-spouse at the time of the improvement;
otherwise, said property shall be retained in ownership by the
owner-spouse, likewise subject to reimbursement of the cost of
the improvement.
In either case, the ownership of the entire property shall
be vested upon the reimbursement, which shall be made at the
time of the liquidation of the conjugal partnership.
(1)
It is important to Note which is Bigger or Greater —
215
Art. 445
(2)
CIVIL CODE OF THE PHILIPPINES
(a)
the value of the property just before the improvement
was made; or
(b)
its value after the improvement including the cost.
Rules
If (a) is greater, the whole thing belongs to the
owner-spouse, without prejudice to reimbursement of the
conjugal partnership.
If (b) is greater, the whole thing belongs to the
conjugal partnership but the owner-spouse must be reimbursed.
(3)
If on the lot of the husband worth P1,000,000, a 5-million-peso (P5,000,000) house is constructed, the house
and lot will belong to the conjugal partnership, but it
will reimburse the husband P1,000,000. The ownership
will be vested in the conjugal partnership at the time
of reimbursement and this reimbursement will be made
when the conjugal partnership is liquidated.
(4)
In No. 3, if the house costs less than P1,000,000, the
husband will be the owner of the house and lot, but he
must reimburse the conjugal partnership the cost of the
house.
Caltex (Phils.), Inc. v. Felias
L-14309, June 30, 1960
FACTS: A husband and his wife, with conjugal funds,
constructed a building on a lot owned by the wife’s parents.
Subsequently, the parents donated the said lot to the wife. ISSUE: Who now owns the land?
HELD: The lot is the separate property of the wife, NOT
conjugal, because the building was constructed when the land
still belonged to the parents of the wife. What is applicable is
the rule that “the accessory follows the principal.” When the
building was constructed, the same became the property of the
wife’s parents by accession, and when later on the land was
donated to the wife, the lot became her separate property, and
the donation transmitted to her the rights of a landowner over
216
CIVIL CODE OF THE PHILIPPINES
Art. 446
a building constructed on it. It would have been different had
the building been constructed at the time the lot was already
owned by the wife. In this case, Art. 158 of the Civil Code (now
Art. 120 of the Family Code) would apply.
(4) Meaning of ‘Building’ in Art. 445
“Whatever is built’’ refers to all kinds of constructions with
a roof, and used as residence, for office, or social meetings, etc.
(See Philippine Sugar Estate Development v. Pozat, 48 Phil.
536).
(5) Some Latin Legal Maxims in Connection with Accession
Industrial
(a)
Accessorium non ducit sed sequitor suum principali. (The
accessory does not lead but follows its principal. Or: if the
principal is given, the accessory is also given; but if the
accessory is given, this does not necessarily mean that
the principal is also given.)
(b)
Accessorium sequitor naturam rei cui accedit. (The accessory follows the nature of that to which it relates.)
(c)
Aedificatum solo, solo cedit. (What is built upon the land
goes with it; or the land is the principal, and whatever is
built on it becomes the accessory.)
Art. 446. All works, sowing, and planting are presumed
made by the owner and at his expense, unless the contrary
is proved.
COMMENT:
(1)
Presumption that Works, Sowing and Planting Were
Made by the Landowner and at His Expense
The two disputable (juris tantum) presumptions under
this Article are:
(a)
The works, sowing, and planting were made by the owner.
(See Art. 437 on surface right, and Art. 445).
217
Art. 447
(b)
CIVIL CODE OF THE PHILIPPINES
They were made at the owner’s expense. (This is so even
if another actually undertook the task, for then he might
have been acting only as the agent. [See 3 Manresa, pp.
195-197].). Morever, even if he did not so act as agent,
we may still presume that the undertaking was made
with the landowner’s consent. If the building be large,
expensive, or important, common sense may direct us to
believe that the owner of the building is also the owner
of the land. BUT this would not be the case for under the
principles of accession, we must still presume that the
owner of the land is the person who erected the building.
(See 3 Manresa 196).
(2) Example
I own a piece of land containing rice crops and a fence.
It is presumed that I made the plantings and the fence at
my expense. This presumption is however rebuttable, as the
contrary may be proved, according to the law. The usefulness
of the presumption lies in the fact that I do not have to prove
anymore that they were constructed at my expense, since I have
the presumption in my favor. Whoever alleges the contrary
should prove his contention.
[NOTE: The two presumptions in this Article are rules
of evidence or of substantive law, not mere rules of procedural
law. (See U.S. v. Genato, 15 Phil. 171).].
Art. 447. The owner of the land who makes thereon, personally or through another, plantings, constructions or works
with the materials of another, shall pay their value; and, if he
acted in bad faith, he shall also be obliged to the reparation
of damages. The owner of the materials shall have the right
to remove them only in case he can do so without injury to
the work constructed, or without the plantings, constructions
or works being destroyed. However, if the landowner acted
in bad faith, the owner of the materials may remove them
in any event, with a right to be indemnified for damages.
218
CIVIL CODE OF THE PHILIPPINES
Art. 447
COMMENT:
(1) Rules When Landowner Constructs or Plants on His
Land With the Materials of Another
This Article treats of the rights and obligations of:
(a)
the owner of the land who uses the materials of
another;
(b)
the owner of the materials.
(2) Rights and Obligations of the Owner of the Land Who
Uses the Materials of Another
(a)
If the landowner acted in good faith —
He becomes the owner of the materials but he must
pay for their value. The only exception is when they can
be removed without destruction to the work made or to
the plants. In such a case, the owner of the materials can
remove them.
(b)
If the landowner is in bad faith —
He becomes the owner of the materials but he must
pay:
1)
their value;
2)
and damages.
[The exception is when the owner of the materials
decides to remove them whether or not destruction would
be caused. (In this case, the materials would still belong
to the owner of said materials, who in addition will still
be entitled to damages).].
(3) Rights and Obligations of the Owner of the Materials
(a)
If the landowner acted in good faith —
1)
The owner of the materials is entitled to reimbursement (provided he does not remove them).
2)
He is entitled to removal (provided no substantial
injury is caused).
219
Art. 447
(b)
CIVIL CODE OF THE PHILIPPINES
If the landowner acted in bad faith —
1)
The owner of the materials is entitled to the ABSOLUTE right of removal and damages (whether or not
substantial injury is caused).
2)
He is entitled to reimbursement and damages (in
case he chooses not to remove).
(4) Illustrative Examples
(a)
A, on his land, constructed a house with the materials of
B. A is in good faith. Can B remove said materials?
ANS.: No, B cannot remove said materials because
to do so would necessarily injure the house. (Art. 447).
(b)
A rented B’s land, and built on it a house, with materials
belonging to C. A was in good faith. Are A and C co-owners of the house?
ANS.: No, they are not co-owners of the house because by the principle of accession, just because a person’s
materials were used, it does not follow that the owner of
the materials becomes owner of any part of the building.
At most, C is entitled to reimbursement for their value.
(Liwanag v. Yu-Sonquian, 5 Phil. 147).
(c)
A, on his land, constructed a house with the materials of
B. A is in bad faith. Can B remove the materials even if
in doing so, the whole structure will be destroyed? Can
B also ask for damages?
ANS.: Yes, B is allowed the right of absolute removal
as well as indemnification for damages. (This is to penalize A’s bad faith.) (Art. 447).
(d)
What is the measure of damages?
ANS.: “Indemnification for damages shall comprehend not only the value of the loss suffered (dano
emergente or danos) but also that of the profits which the
obligee failed to realize (lucro cessante or perjuicios).” (Art.
2200).
220
CIVIL CODE OF THE PHILIPPINES
Art. 447
(5) Queries
(a)
The law says: “Pay their value” (reimbursement). Suppose
the landowner wants to return the materials instead of
reimbursing their value, may this be done even without
the consent of the former owner of the materials?
ANS.: It depends:
(b)
1)
If no damage has been made to the materials, or
they have not been transformed — as a result of the
construction — they may be returned (of course, at
the landowner’s expense).
2)
If damage has been made or there has been a
transformation, they cannot be returned anymore.
(Note that the law does not grant this option to the
landowner). (See 3 Manresa 204).
The law says: “the owner of the materials shall have the
right to remove ...” Suppose the landowner has already
demolished or removed the plantings, constructions, or
works, is the owner of the materials still entitled to claim
them?
ANS.: Although there are differences of opinion on
this matter, the best rule seems to be that the owner of
the materials is still entitled to get them since the law
makes no distinction. (See 3 Manresa 206-207). Moreover,
the landowner may insist on returning said materials for
evidently there is no accession. (Ibid.).
(c)
A builds a house on his land using the materials of B.
Later, A sells the house and land to C. Against whom will
B have a right of action, against A, the builder, or C, the
buyer?
ANS.: The law is silent on this point, but it would
seem that the right of action should be directed against
C, since it was he who benefited from the accession. (See
Gonzon v. Tiangco, [CA] 36 O.G. 822; see also Martin v.
Martin, L-12439, May 22, 1959).
221
Art. 447
CIVIL CODE OF THE PHILIPPINES
(6) Meaning of Bad Faith and Good Faith in Connection
with Art. 447
Although Art. 447 does not define good faith or bad faith,
we may, by analogy, apply the definitions provided for in Arts.
453 and 526. Hence:
(a)
The builder, planter or sower is in BAD faith if he makes
use of the land or materials which he knows belong to
another. (Thus, one who buys land without verifying
whether or not the land belongs to another with a Torrens Title and who subsequently builds on it, is a builder
in bad faith, if indeed the land is already registered under the Land Registration Law in the name of another.
[J.M. Tuason and Co. v. Macalingdong, L-15398, Dec. 24,
1962]). Thus, also, a purchaser is not a builder in good
faith where he has presumptive knowledge of an existing
Torrens Title in favor of another. [J.M. Tuason v. Mumar,
L-21544, Sep. 30, 1968]. Likewise, one who is aware of a
notice of lis pendens is a purchaser in bad faith. [Clemente
v. Pascua, L-25153, Oct. 4, 1968].)
(b)
He is in GOOD faith if he did not know that he had no
right to such land or materials. (If a landowner with a
Torrens Title builds beyond the boundaries of his property
as stated in the certificate of title (and thus constructs
partly on his neighbor’s land), is he necessarily in bad
faith? No, for he may still be in good faith. No one, not
even a surveyor, can determine the precise location of
his land by simply examining his title. (Co Tao v. Chico,
L-49167, Apr. 30, 1968).
(c)
The owner of the materials is in BAD faith if he allows
another to use the materials without informing him of the
ownership thereof.
(d)
The owner of the materials is in GOOD faith if he did not
know that another was using his materials; or granting
that he did know, if he informed the user of the ownership
thereof and made the necessary prohibition.
(7) Rule When Both Parties are in Bad Faith
Regarding Art. 447, what rule should apply if the landowner and the owner of the materials are both in bad faith?
222
CIVIL CODE OF THE PHILIPPINES
Art. 447
ANS.: Consider them in good faith.
(8) Rule When Landowner is in Good Faith But Owner of
Materials is in Bad Faith
Regarding Art. 447, what rule should apply if the landowner is in good faith, but the owner of the materials is in bad
faith?
ANS.: There is no provision of the law on this point, but
it would seem that the landowner would not only be exempted
from reimbursement, but he would also be entitled to consequential damages (as when for instance, the materials are of
an inferior quality). Moreover, the owner of the materials would
lose all rights to them, such as the right of removal, regardless
of whether or not substantial injury would be caused.
(9) Presumption of Good Faith
Good faith is always presumed, and upon him who alleges
bad faith rests the burden of proof. (See Art. 527).
(10) Case
Heirs of Nicolas Y. Orosa v. Hon.
Eutropio Migrino and Goldenrod, Inc.
GR 99338-40, Feb. 1, 1993
Under Article 447 of the Civil Code, the plaintiff in an action for quieting of title must at least have an equitable title to
or an interest in the real property which is the subject matter
of the action.
In the case at bar, evidence of Goldenrod’s capacity on
this point is inexistent because Goldenrod is not asserting a
claim to the property. On the contrary, it had admitted having
alienated its interest in the land referred to as Lot 9 Psu-11411
Amd-2 to the consortium. Thus, Goldenrod is not an interested
party capable of instituting an action to quiet title, either by
intervening in LRC 2839 or by instituting a separate action.
The right to commence such as separate action pertains to its
223
Art. 448
CIVIL CODE OF THE PHILIPPINES
Vendee, if the latter wishes to defend the validity of its 1987
purchase from Goldenrod and to hold the Vendor Goldenrod
liable on its warranty of title.
Art. 448. The owner of the land on which anything has
been built, sown or planted in good faith, shall have the right
to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in articles 546
and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy
the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.
COMMENT:
(1)
Rule When On the Land of a Person in Good Faith, Another Builds, Sows, or Plants in Bad Faith
Morales v. CA
83 SCAD 750
(1997)
Clearly, Art. 448 applies only when the builder, planter or
sower believes he has the right to so build, plant or sow because
he thinks he owns the land or believes himself to have a claim
of title.
Example:
On O’s land, B built in good faith a house. O is in good
faith. What are O’s rights?
ANS.: O is entitled to an option. He is therefore allowed:
(a)
to appropriate for himself the house upon payment
of the proper indemnity;
224
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 448
or to compel the builder B to buy the land upon
which the house has been built, unless the value of
the land be considerably more than the value of the
house. (In the latter case, rent should be paid.)
[NOTE: Since the choice given the landowner is
confined to either an appropriation of the house or to a
compulsory selling of the land, he has no right of removal
or demolition, UNLESS after having selected a compulsory sale, the builder fails to pay for the land. (Ignacio
v. Hilario, 43 O.G. 140, 76 Phil. 605). The reason for the
Ignacio case is clear. If the builder cannot pay for the
land, he should not be allowed to continue using it to the
owner’s detriment. Hence this time, the builder must remove the construction. If the landowner chooses to get the
house, he becomes indebted monetarily. Having exercised
his option, his duty now becomes a monetary obligation.
Failure to pay may result in execution. (Tayag v. Yuseco,
L-14043, Apr. 16, 1959).].
[NOTE: There is nothing, however, in the law to
prevent the parties from agreeing to adjust their rights in
some other way. In this sense, the article is not mandatory. (3 Manresa 219).].
[NOTE: It is the owner of the land who has the
choice or option, not the builder. Hence, the builder cannot compel the owner of the land to sell such land to him.
Thus, the right of the builder in good faith is the right
to reimbursement for the improvements, that is, if said
improvements are appropriated by the owner of the land.
(Quemuel and Solis v. Olaes and Prudente, L-11084, Apr.
29, 1961; see Acuña and Diaz v. Furukawa Plantation Co.,
L-5833, Oct. 22, 1953).].
[NOTE: The option granted to the landowner is not
absolute, as when it is impractical for the landowner to
exercise the first alternative. In the case of Leonor Grana
and Julieta Torralba v. Court of Appeals, et al., L-12486,
Aug. 31, 1960, a builder in good faith built a portion of his
house on another’s lot. In speaking of the landowner’s remedy, the Court held that although an alternative is given
by the law, still in this case, it would be impracticable for
225
Art. 448
CIVIL CODE OF THE PHILIPPINES
the landowner to choose to exercise the first alternative,
i.e., buy that portion of the house standing on his land, for
the whole building might be rendered useless. The workable
solution is for him to select the second alternative, namely,
to sell to the builder that part of his land on which was
constructed a portion of the house. If the builder is unwilling to buy, he must vacate the land, and pay rentals until
he does so. Prior to this exercise of choice, however, he will
not be required to pay rents because of his good faith and
consequent right of retention. (See Miranda v. Fadullon,
51 O.G. 6226).].
Inter-Regional Development Corporation
v. Court of Appeals
L-89677, July 22, 1975
FACTS: On the land of someone, a person planted
certain crops. Does the landowner automatically or ipso
facto become the owner of said planted crops?
HELD: No, the owner of the land does not ipso facto
become the owner of what had been planted on his land
by another. Firstly, we have to determine whether the
planter was in good faith or bad faith. Secondly, assuming
that the planter was in good faith, the landowner, should
he desire to get the crops, must first give the proper indemnification to the planter.
Tan Queto v. CA, et al.
GR 35648, Feb. 27, 1987
(Resolution on a Motion for Reconsideration,
setting aside the S.C. decision dated May 19, 1983)
The net result of mutual bad faith between the
owner and the builder entitles the builder to the rights
of a builder in good faith. (Art. 448, Civil Code). Ergo, reimbursement should be given to the builder if the owner
decides to appropriate the building for herself.
The Chapter on Possession (jus possessionis, not jus
possidendi) in the new Civil Code refers to a possessor
other than the owner. The difference between a builder
226
CIVIL CODE OF THE PHILIPPINES
Art. 448
(or possessor) in good faith and one in bad faith is that
the former is NOT AWARE of the defect or flaw in his
title or mode of acquisition while the latter is AWARE of
such defect or flaw. (Art. 526, Civil Code). But in either
case, there is a flaw or defect.
A person who builds in his own property is not
merely a possessor or builder in good faith (this phrase
presupposes ownership in another) much less is he a
builder in bad faith. He is a builder-possessor (jus possidendi) because he is the owner himself.
Fernandez Del Campo v. Abeisa
L-49219, Apr. 15, 1988
Plaintiffs and defendant are co-owners pro indiviso
of a lot in the proportion of 2/3 and 1/3 each, respectively.
An appointed commissioner submitted a partition. The
house built by defendants, however, happened to be in
the portion given to plaintiffs. Plaintiffs contended and
were upheld by lower court that defendant is not entitled
to reimbursement of cost of house built because as a coowner he is not a third person in contemplation of Art.
448 defining builder in good faith.
However, when as in this case, the co-ownership is
terminated by the partition and it appears that the house
of defendants overlaps or occupies a portion of 5 sq.m. of
the land pertaining to plaintiffs which defendants obviously built in good faith, then the provisions of Art. 448
of the new Civil Code should apply.
(2) Bar
X purchased subdivision Lot 6. Instead of building on Lot
6, X in good faith built an apartment house worth P8 million
on Lot 7, which is valued at P8.5 million belonging to Z and
without Z’s knowledge.
Questions:
(a)
Who has the preferential right of consolidating ownership on both land and building?
227
Art. 448
CIVIL CODE OF THE PHILIPPINES
(b)
May Z compel X to remove the apartment house?
(c)
(d)
May Z compel X to buy the land?
If X agrees to pay Z for the latter’s land but fails to
comply, may Z demand removal of the apartment?
Before a settlement is reached between X and Z,
may Z demand rental for his land? Explain your
answers.
(e)
Answers:
(a)
Z has the preferential right, for he has the option
referred to in Art. 448.
(b)
No, Z cannot compel the removal or demolition, for
such alternative is not granted him under the Article.
(c)
Yes, Z can compel X to buy the land, since its value
is not considerably more than the value of the apartment, the difference being only P.5 million.
(d)
This time the answer is YES, according to the case of
Ignacio v. Hilario, 76 Phil. 605. Since the landowner
Z has chosen to sell the land, the builder must pay.
If he cannot pay, he should not be allowed to use
the land to the owner’s detriment. Hence, he must
remove the building.
(e)
Before settlement is reached between X and Z, Z may
not legally demand rental for his land, for after all
X is a builder in good faith, and is entitled to retain
in the meantime. This right of retention would be
nugatory if he were to be made to pay.
[NOTE: The answers given hereinabove are based on
the premise that the builder is in GOOD FAITH, as stated in
the problem. Be it remembered, however, that if the problem
had dealt with lots covered by Torrens Titles, X who erroneously builds on the adjoining lot in the subdivision should be
considered a builder in BAD FAITH, there being presumptive
knowledge of the Torrens Title, the area, and the extent of the
boundaries. (Tuason & Co. v. Lumanlan, L-23497, Apr. 26, 1968,
23 SCRA 230, and Tuason and Co. v. Macalindong, L-15398,
Dec. 29, 1962, reversing Labajo v. Enriquez, 102 Phil. 908).].
228
CIVIL CODE OF THE PHILIPPINES
Art. 448
(3) Reason for the Provision
It is true as a rule that whatever is built, planted, or
sown on the land of another should, by the principle of accession, belong to him (landowner). However, when the planter,
builder, or sower has acted in good faith, a conflict of rights
arises between the owners, and it becomes necessary to protect
the owners of both without causing injustice to either. In view
of the impracticability of creating what Manresa calls a state
of forced co-ownership (Vol. 3, 4th Ed., p. 213), the law has
provided a just and equitable solution. (Bernardo v. Bataclan,
37 O.G. No. 74, p. 1382; see also Co Tao v. Chan Chico, L-49167,
Apr. 30, 1949). [NOTE: The builder is considered in good faith
if he thought that the land was his: the landowner is in good
faith if he did not know that somebody was building on his
land, or even if he did know, if he expressed his objection. (See
Co Tao v. Chan Chico, Ibid.).].
Spouses Rafael Benitez and
Avelina Benitez v. CA
77 SCAD 793, GR 104828, Jan. 16, 1997
The advantage in Art. 448 is accorded the landowner because his right is older, and because, by the principle of accession,
he is entitled to the ownership of the accessory thing.
There can be no preemptive right to buy even as a compromise, as this prerogative belongs solely to the landowner.
No compensation can be legally forced on him, contrary to what
petitioners ask from this Court. Such an order would certainly
be invalid and illegal.
(4) Why Option Is Given to the Landowner and Not to the
Planter or Builder
It is the owner of the land who is allowed to exercise the
option because:
(a)
his right is older;
(b)
and because, by the principle of accession, he is
entitled to the ownership of the accessory thing. (3
Manresa, p. 213, cited in the case of Bernardo v.
229
Art. 448
CIVIL CODE OF THE PHILIPPINES
Bataclan, supra). In view of this, it is clear that the
builder does not have the option. (Acuña v. Furukawa Plantation, 49 O.G. 5382). However, the lien
of the builder on the constructions may be annotated
in the certificate of title by means of a petition filed
in the original case wherein the decree of registration under the Torrens system was entered. This is
to protect the right of the builder to the indemnity,
in case the property is sold to a purchaser for value.
(Atkins, Kroll and Co. v. Domingo, 46 Phil. 362).
(5) Indemnity in Case of Appropriation
In case the owner chooses to appropriate the thing built,
or sown, or planted, how much indemnity should be paid by
him?
ANS.: The indemnity provided for in Arts. 546 and 548 of
the new Civil Code. (Mendoza and Enriquez v. De Guzman, 52
Phil. 1641). Please note, however, that ownership over the thing
built or sown or planted does not pass to the landowner till after
payment therefor has been given. (TS, Jan. 2, 1928). Payment
is to be made either on the date fixed by agreement or the date
fixed by the Court. (Bataclan v. CFI, 61 Phil. 428).
[NOTE: After the owner of the land has given to the
builder or possessor in good faith the proper indemnities, the
builder or possessor may be ordered to VACATE the land.
(People v. Repato, L-17985, Sep. 29, 1962).].
Fernandez v. Abeisa
GR 49219, Apr. 15, 1988
FACTS: In an action for partition of a 45-square meter
lot, Concepcion got 2/3 or 30 square meters of the lot while
Bernarda got 1/3 or 15 square meters. After the houses of
Concepcion and Bernarda were surveyed, it was found that
the house of Bernarda occupied the portion of 5 square meters
of the lot alloted to Concepcion. Concepcion and Bernarda
manifested their conformity to the report of the Commissioners
and asked the trial court to settle and adjudicate who between
them should take possession of the 5 square meters of the
230
CIVIL CODE OF THE PHILIPPINES
Art. 448
land in question. The trial court held that Art. 448 of the Civil
Code does not apply to a case where the builder is a co-owner.
Hence, it ordered Bernarda to remove part of the house which
encroached on the lot of Concepcion and to deliver the 5-meter
portion to the latter.
The Supreme Court modified the decision of the trial court
by ordering Concepcion to indemnify Bernarda for the value of
the portion of the latter’s house in accordance with Art. 549 of
the Civil Code, if Concepcion elects to appropriate it. Otherwise,
Bernarda shall pay the value of the 5 square meters of land
occupied by her house at such price as may be agreed upon
with Concepcion. If its value exceeds the portion of the house
that Bernarda built, the latter may choose not to buy the land
but must pay a reasonable rental for the use of the portion of
Concepcion’s land as may be agreed upon by them. The Court
thus —
HELD: Applying Article 448 of the Civil Code, Concepcion has the right to appropriate said portion of the house of
Bernarda upon payment of indemnity to the latter as provided
for in Article 546 of the Civil Code. Otherwise, Concepcion may
oblige Bernarda to pay the price of the land occupied by her
house, but if the price asked for is considerably much more
than the value of the portion of Bernarda’s house built thereon,
then the latter cannot be obliged to buy the land. Bernarda
shall then pay the reasonable rent to Concepcion upon such
terms and conditions that they may agree. If they disagree,
the trial court shall fix the terms thereof. Of course, Bernarda
may demolish or remove the portion of her house, at her own
expense if she so decides.
(6) The Indemnities to be Given
(a)
Necessary Expenses. (Art. 546, par. 1).
(b)
Useful Expenses. (Art. 546, par. 2).
(c)
Luxurious Expenses — if he desires to appropriate them
for himself. (Art. 548).
[NOTE: Necessary expenses are those made for the
preservation of the thing (4 Manresa 270) or those without
231
Art. 448
CIVIL CODE OF THE PHILIPPINES
which the thing would deteriorate or be lost (8 Scaevola
408) such as those incurred for cultivation, production,
and upkeep. (Mendoza v. De Guzman, 52 Phil. 164).
Necessary expenses include necessary repairs (Alburo v.
Villanueva, 7 Phil. 277). By ordinary repairs are understood such as are required by the wear and tear due to
the natural use of the thing, and are indispensable for its
preservation. (Art. 529, Civil Code).
Upon the other hand, useful expenses are those that
augment the income of the thing upon which they are spent
(4 Manresa 274), or add value to the property (Aringo v.
Arena, 14 Phil. 263) but do not include the value of farming
implements or work animals which do not remain on the
land. (Valenzuela v. Lopez, 51 Phil. 279).].
(7) Problem
A builder constructed in good faith a house on the land
of X. X elected to appropriate the house and bound himself to
pay the proper indemnities. Before the indemnities are given
—
(a)
May the builder retain the house?
(b)
Is the builder entitled to the rents that accrue in the
meantime (in case the building is leased to another)?
(c)
Is the builder entitled to the fruits that will accrue during
the time he retains the premises?
(d)
Is the owner of the land entitled to collect rent from the
builder while the latter retains the house?
ANS.:
(a)
Yes, the builder is entitled to retain the house until
he is paid the full indemnities since he is a builder
in good faith. (See Art. 546; see also Grana and Torralba v. Court of Appeals, et al., L-12486, Aug. 3,
1960). Incidentally, this right of retention may be
recorded on the certificate of title, and thus constitute a lien on the property. (See Atkins, Kroll and
Co. v. Domingo, 46 Phil. 362).
232
CIVIL CODE OF THE PHILIPPINES
Art. 448
(b)
No, the builder is not entitled to the rents, since his
possession is no longer that of a possessor in good
faith. Note that election by the landowner had already been made. Therefore, if the builder receives
the rents, he must deduct them from whatever indemnity is due him. (See Mendoza v. De Guzman,
52 Phil. 164).
(c)
No, for again we may say that during said retention, he is not considered a possessor in good faith.
(Ibid.).
(d)
No, otherwise the right of retention till indemnity
is given would be rendered nugatory. [Tufexis v.
Chunaco, (CA) 36 O.G., p. 2455; Grana and Torralba
v. Court of Appeals, et al., L-12486, Aug. 31, 1960;
Miranda v. Fadullon, et al., 51 O.G. 6226].
Pecson v. CA
61 SCAD 385
(1995)
It is the current market value of the improvements
which should be made the basis of reimbursement to the
builder in good faith.
Ballatan v. CA
304 SCRA 34
(1999)
The right to choose between appropriating the improvement or selling the land on which the improvement
of the builder, planter, or sower stands is GIVEN to the
OWNER of the land.
In the event that the owner elects to SELL to the
builder, planter, or sower the land or which the improvement stands, the price must be FIXED at the prevailing
MARKET VALUE at the time of payment.
(8) Rights of Landowner Before He Makes the Choice
Before the landowner exercises the option, it is evident
that he is not yet the owner of whatever has been built, planted,
233
Art. 448
CIVIL CODE OF THE PHILIPPINES
or sown, for his only right in the meantime is to exercise the
option. (TS, May 21, 1928). Neither builder nor landowner can
oust each other, for until indemnity is paid, the builder has the
right of retention. (See Martinez v. Baganus, 28 Phil. 500). It
has been held by the Spanish Supreme Court that ownership
over the accessory passes only after payment of the indemnity.
(TS, Jan. 2, 1928).
(9) Bar
A constructed a house on land belonging to B in the belief that the land was his own. Upon discovering the fact, B
demanded that A should pay him the value of the land, but A
failed to do so.
(a)
Did A’s failure to pay automatically make B the
owner of the house by right of accession? Reasons.
(b)
What remedies are available to the parties? Discuss.
ANS.:
(a)
A’s failure did NOT automatically make B the owner of the
house by the right of accession. REASON: No such right
is given by Art. 448 of the Civil Code. Said Article merely
gives the landowner an option to appropriate for himself the
house upon payment of the proper indemnity, or to compel
the builder to buy the land upon which the house has been
built, unless the value of the land be considerably more
than the value of the house (in which case, rent should be
paid). Our Supreme Court has held that there is nothing in
the language of the law (Arts. 448 and 548), which would
justify the conclusion that upon failure of the builder to
pay the value of the land when such is demanded by the
landowner, the latter automatically becomes the owner of
the improvements. (Filipinas Colleges, Inc. v. Maria Garcia
Timbang, L-12812, Sep. 13, 1959). Indeed, ownership over
the accessory passes only after payment of the indemnity.
(TS, Jan. 2, 1928).
(b)
The parties have the following remedies:
1)
They may leave things as they are and assume the
relation of lessor and lessee. The rent may be fixed
234
CIVIL CODE OF THE PHILIPPINES
Art. 448
by the court in case of disagreement. (Miranda v.
Fadullon, 51 O.G. 6226).
2)
The landowner may have the house removed. This
right of demolition exists because he has chosen to
sell his land, and the builder has failed to pay. (Ignacio v. Hilario, 76 Phil. 605).
3)
The landowner may consider the price of the land
as an ordinary money debt of the builder. Therefore,
he may enforce payment thru an ordinary action
for the recovery of a money debt. The execution of
the judgment may be done by levying on the land
and the house both of which may be sold at a public
auction. The landowner will then keep for himself
the proceeds equivalent to the value of the land; the
rest will be turned over to the builder, who cannot
complain of any deficiency. (Bernardo v. Bataclan,
66 Phil. 598; Tayag v. Yuseco, L-14043, Apr. 16,
1959).
(10) Problem
If the landowner elects to compel the builder to buy the
land, is the builder entitled to the right of retention?
ANS.: No, because he is the one required to pay. Had
the landowner chosen to appropriate the building but has not
yet paid the indemnity, the answer would be otherwise. (See
Bernardo v. Bataclan, 37 O.G. 1382).
[NOTE: If the value of the land is more than the value
of the building, can the landowner still avail himself of the
option of compelling the builder to pay for the land? Yes, unless the value of the land is considerably more than the value
of the building. The meaning of “considerably more” is to be
determined by the facts of the case.].
(11) When Art. 448 Is Applicable and When It Is Not Applicable
(a)
Art. 448 applies only when the builder, planter, or sower
really believes he has the right to so build, plant, or sow
235
Art. 448
CIVIL CODE OF THE PHILIPPINES
because he thinks he owns the land. (See Alburo v. Villanueva, 7 Phil. 277). He must, therefore, have a claim
of title, i.e., he must really be a possessor in good faith.
(Ibid.) The same rule applies if the builder constructs
with the consent of the landowner, the law treating both
as possessors of good faith. (See De Guzman v. Fuente,
55 Phil. 501). Thus, Art. 448 applies if a son constructs
a house on his father’s land with the latter’s knowledge
and consent (Javier v. Javier, 7 Phil. 261) or if a stranger
gets the owner’s permission to build. (See Aringo v. Arena,
14 Phil. 263).
Sagrada Orden de Predicadores v.
National Coconut Corp.
48 O.G. No. 7, p. 2468
FACTS: Prior to the last war, A owned certain properties. During the Japanese Occupation, the properties
were taken by a Japanese corporation, which eventually
registered them in its name. At the end of the war, the
Alien Property Administration took possession of the
properties for a while, but eventually turned over their
use and possession to the government. The Government
collected rent from the lessee of the property. Eventually,
the title of the Japanese corporation was annulled, and A
was declared the owner of the properties involved. Issue:
Is the Philippine Government entitled to keep the rent it
had collected from the lessee?
HELD: Yes, for the Government can be considered
a possessor in GOOD FAITH of the properties involved.
(b)
Art. 448 does NOT apply:
1)
when the builder, planter, or sower does not claim
ownership over the land, but possesses it as mere
holder, agent, usufructuary, or tenant. Here, he
knows that the land is not his. Upon the other hand,
it may be that he thought he had the right to sow
plant or construct. Hence, properly speaking, a lessee, for example, is neither a builder in good faith nor
236
CIVIL CODE OF THE PHILIPPINES
Art. 448
in bad faith. His rights are governed by Art. 1678.
(See Alburo v. Villanueva, 7 Phil. 277, and Quemuel,
et al. v. Olaes, et al., L-11084, Apr. 29, 1961; see also
Racaza v. Susana Realty, Inc., L-20330, Dec. 22,
1966). If the builder is a usufructuary, his rights
will be governed by Arts. 579 and 580. In a case
like this, the terms of the contract and the pertinent
provisions of law should govern. (3 Manresa 215-216;
see also Montinola v. Bantug, 71 Phil. 449).
Exception:
If a tenant (agricultural tenant) whose lease is
about to expire, nevertheless still sows, not knowing that the crops will no longer belong to him, Art.
448 can be applied. (TS, Nov. 30, 1900; 3 Manresa
216).
2)
when the builder, planter, or sower is not a stranger
but a co-owner, even if later on, during the partition, the portion of land used is awarded to another
co-owner. The reason is that such co-owner really
builds, plants, or sows on his own land, and not on
land not belonging to him. (Viuda de Arias v. Aguilar, [CA] O.G. Supp., Aug. 30, 1941, p. 126; 40 O.G.
[5th Series p. 126].).
3)
when a person constructs a building on his own
land, and then sells the land but not the building
to another, there can be no question of good faith or
bad faith on the part of the builder. Here, he can be
compelled to remove the building. (Golengco v. Regalado, et al., 48 O.G. 5282). The new owner of the
land will thus not be required to pay any indemnity
for the building. (Ibid.).
4)
when the builder is a belligerent occupant, such as
for example, the Japanese Imperial Armed Forces,
the constructions made by it during the war are
owned not by the owner of the land but by the Philippines, since the latter emerged victor in the last war.
(Republic v. Lara, May 29, 1954, 50 O.G. 5778).
237
Art. 448
CIVIL CODE OF THE PHILIPPINES
Southwestern University v. Salvador
L-48013, May 28, 1979
A lessee who builds a house (useful improvement)
on the land may remove the same, but cannot compel
the lessor to sell to him the land. He is not considered a
possessor in good faith or a possessor in bad faith.
Pecson v. CA
61 SCAD 385
(1995)
Art. 448 does not apply to a case where the owner of
the land is the builder, sower, or planter who then later
loses ownership of the land by sale or donation.
(12) Where Art. 448 Also Applies
Even if the land used be of public dominion. Here, it is
the State that can exercise the option. Note that the law makes
no distinction, as between use in this case of public or private
land. (See Insular Gov’t. v. Aldecoa and Co., 19 Phil. 505).
Insular Government v. Aldecoa and Co.
19 Phil. 505
FACTS: During the Spanish regime, a private company was orally given permission by the military governor
of the province concerned to take possession of a piece of
foreshore land. The company then constructed on said
land a warehouse, a pier, and a retaining wall.
ISSUE: Is the company considered a builder in good
faith under the provisions of Art. 448?
HELD: Yes, in view of the prior permission that had
been granted to it by the proper authorities concerned.
(13) Rule if Landowner Refuses to Make the Choice
In the case of Ignacio v. Hilario, 76 Phil. 605, 43 O.G. 1,
p. 140, the landowner refused either:
(a)
to pay for the building;
238
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 448
or to sell the land to the builder who was in good
faith. The Court, when asked to order the removal
of the building, refused to do so, on the ground that
it was the duty of the landowner to exercise either
alternative, and not to refuse both.
Moreover, even granting that the presence of the building
causes annoyance or damage to the landowner, still he cannot
ask indemnification for damages, since the law gives him no
remedies except those provided in the law itself. Exceptions
based on equitable considerations are not mentioned in the law.
Note that the building had been constructed in good faith. (See
Gongon v. Tiangco, [CA] 363 O.G. 882). Indeed, a landowner is
entitled to have the construction removed by the builder only
when after having chosen to sell his land, the other party fails
to pay for the same. (Ignacio v. Hilario, 76 Phil. 605, 43 O.G.
No. 1, p. 140). The landowner may even have his land and the
house sold at public auction, keep for himself the proceeds
from the land, and give the rest to the builder. Note that in
this sale at public auction, the proceeds will first be applied to
the land, and the rest will go to the owner of the improvement.
(See Filipinas Colleges v. Timbang, L-12812, Sep. 29, 1959).
Should this balance unfortunately be less than the value of the
building, the builder cannot complain. He will indeed not be
entitled to a reimbursement for the deficiency. (See Bernardo
v. Bataclan, 66 Phil. 598).
(14) Problem
A public service corporation (the Manila Railroad Company) entered X’s land with the intention of expropriating
the same, and immediately began to undertake constructions
thereon. X merely stood by, without any protest. Is X allowed
to get back his property and the constructions thereon?
ANS.: No, because from one point of view, he may not be
considered in good faith; and still from another viewpoint, the
Railroad Company was merely trying to exercise its right to expropriate. The only remedy for X would be to recover damages
for the just value of the property taken. (See Manila Railroad
Co. v. Paredes, 32 Phil. 534; See also De Ynchausti v. Manila
Electric, 36 Phil. 908).
239
Art. 448
CIVIL CODE OF THE PHILIPPINES
(15) Rule in Case the Landowner Sells or In Any Other Way
Alienates the Land
If the landowner sells or in any other way alienates the
land in favor of a stranger, against whom will the builder
have a right of action — against the original owner or the new
owner? It has been held that the action should primarily be
directed against the new owner, because he benefited from the
accession.
(a)
Thus, if the new owner, in buying the land, did not pay for
the construction, he alone is responsible, because it was
he who profited by the accession (if he elects of course to
get the construction). It is unjust for the original owner
to be held responsible. This is particularly true if the
new owner acquired the property in bad faith. That is, he
knows that someone else had built the house. (See Gongon
v. Tiangco, CA, 36 O.G. 822).
(b)
If the new owner paid for the construction, the action may
still be directed against him, BUT this time, he can file
a third-party complaint against the original owner, who
ultimately will have to pay, since it is unfair to compel
the new owner to pay twice (once to the old owner, and
again to the builder). (See 3 Manresa, 211-212; Gongon
v. Tiangco, [CA] 36 O.G. 822).
In the case of Gongon (supra), a chapel was involved
and the Court of Appeals held that a purchaser who buys
lands with improvements belonging to another, and who
knows such fact, places himself in the position of a person
who has benefited by the accession. Thus, the buyer must
pay for the chapel.
Atkins, Kroll & Co. v. Domingo
46 Phil. 362
FACTS: A built on B’s land with the latter’s consent.
The land was later sold to C. Can C be entitled to the
building without giving the proper indemnities?
HELD: Generally, C must give the proper indemnity,
for it is he who would profit by the accession. However,
if the land has a Torrens Title, which indicates B as
240
CIVIL CODE OF THE PHILIPPINES
Art. 448
the owner of both the building and the lot, C is to be
considered as a purchaser in good faith and should not
be required to pay A. The exception is of course when the
buyer has actual knowledge of the true ownership of the
building.
(c)
If the original landowner had not yet made his choice (of
appropriation or compulsory sale) at the time he sold the
land to the new owner, the latter is given the right to
exercise the option; that is, the new owner has the choice
of paying for the value of the construction, or of requiring
the builder to pay for the land. The value of the construction must therefore, in case of disagreement, be fixed by
the court. (Feliciano Martin v. Prudencio Martin, et al.,
L-12439, May 22, 1959).
(16) When Art. 448 May be Applied in Ejectment Cases
If as a result of a defective donation of land, the “donee’’
(he is not really a donee because of the defect in the donation)
constructs in good faith a building thereon, and if there is no
dispute as to ownership of the building, the courts may apply
— even in ejectment cases — the provisions of Art. 448 in order
to avoid multiplicity of actions and to administer practical and
speedy justice. This is true even if in ordinary ejectment cases,
where the occupant has not built anything on the premises, the
only judgment that may generally be rendered by the court is
for the defendant to recover costs, in the event the complaint
is not true, or if it finds the complaint to be true, to render
judgment for the plaintiff for the restitution of the premises,
for the payment of reasonable rent, and for costs. (Tayag, et
al. v. Yuseco, et al., 97 Phil. 712, cited also under Art. 428).
(17) Irrevocability of Choice
Once a choice is made by the landowner, it is generally
irrevocable. Thus, if the landowner has elected to get the building, but is finally unable to pay for the indemnity or value of
the building, she cannot afterwards elect to sell the land. Her
monetary obligation to indemnify can indeed be satisfied by a
levy of execution on her properties. (Tayag v. Yuseco, 97 Phil.
712).
241
Art. 448
CIVIL CODE OF THE PHILIPPINES
Tayag, et al. v. Yuseco, et al.
97 Phil. 712
FACTS: Joaquin Yuseco and his wife were given in 1930
a parcel of land by Maria Lim because of free legal services
rendered to the latter. The donation was, however, void because
it was not made in a public instrument. Yuseco then built a
house on the land, complete with a garage and with servants’
quarters, thinking all the time that the land had now become
his. Shortly before Maria Lim died in 1945, she sold the same
land to her daughter, who now asked Yuseco to either remove
the house, or to pay rent for the land. Yuseco refused, so the
daughter sued for ejectment. She won the ejectment case. (See
Tayag v. Yuseco, 97 Phil. 712, cited under Art. 428 and in Comment 15, Art. 448). Later, she was asked by the lower court to
make her choice between appropriating the house after payment of the proper indemnity (value), and compelling Yuseco
to buy the lot upon which the house had been constructed. She
filed a manifestation stating her desire to get the house after
its value had been properly and fairly determined. The Court,
after due hearing and consideration of the evidence presented
before it, fixed the value at P50,000. When the decision ordered
her to pay, she contended that she still had the right to make
a choice, and that even if she had already chosen, she cannot
pay the price fixed because of financial inability.
HELD: Since her first choice had already been communicated to the court, and she had already been ordered to pay,
her duty has been converted into a monetary obligation. If she
does not or cannot pay, execution on her properties would be
proper. This is part of the judicial machinery of due process in
action. Certainly, there is nothing wrong in it.
(18) Criticism on the Provision by Justice J.B.L. Reyes
Justice J.B.L. Reyes has criticized that portion of Art. 448
exempting the builder or planter from being required to pay for
the value of the land if it is considerably more valuable than
the building or construction on the following grounds:
(a)
The landowner would be forced to have constructions
or plantings which he considers useless.
242
CIVIL CODE OF THE PHILIPPINES
Art. 448
(b)
Squatters may be invited (since good faith is presumed).
(c)
A “forced lease’’ may result and this is not good
because it would be compulsory, and moreover, the
Court may not include the lucrum cessans (unrealized profit) as part of the rent (for this may, in some
cases, be very large).
(d)
The rule is almost equivalent to deprivation of
property for the benefit of another (private) person,
without just compensation, and would thus be contrary to the Constitution.
(e)
Since it was the planter or builder who made the
mistake, he must bear the losses resulting from his
own actuations, regardless of his good or bad faith.
(Reyes, Observations on the new Civil Code, 15 Lawyer’s Journal 499).
(19) Reply of the Code Commission
The purpose of the clause being questioned is to prevent
injustice, such as when a building worth P800,000 is built on
a P3,000,000 commercial parcel of land. The lucrum cessans
may be included in the rent by the courts in case of the failure
of the parties to agree. No lease is compulsory since the owner
is allowed the remedy of appropriation. (See Memorandum of
the Code Com., Feb. 17, 1951, p. 3).
[NOTE: Is not the lease practically compulsory since the
landowner may find no use at all for the building and consequently does not wish to appropriate it? Upon the other hand,
the landowner is partly to be blamed for where was he all the
time when the building was being constructed?].
(20) Rule in Installment Sales
Roque v. Lapuz
L-32811, Mar. 31, 1980
The fact that the installment buyer of a lot has erected
a substantial improvement thereon such as a house does not
justify the grant to him of a longer period within which to pay
243
Art. 448
CIVIL CODE OF THE PHILIPPINES
the installments, otherwise the land will become an accessory
to the house.
(21) Where Art. 448 May Apply By Analogy
Pecson v. CA
61 SCAD 385
(1995)
The provision of Art. 448 of the Civil Law may be applied
by analogy to a case where one loses the ownership of the land
on which he earlier built an apartment.
(22) What a Judicious Reading of Art. 448 Will Show
Technogas Phil. Mfg. Corp. v. CA
79 SCAD 290
(1997)
Petitioner did not lose its rights under Art. 448 of the
Civil Code on the basis merely of the fact that some years after acquiring the property in good faith, it learned about and
aptly recognized the right of private respondent in the instant
case to a portion of the land occupied by its building, the supervening awareness of the encroachment by petitioner does
not militate against its right to claim the status of a builder
in good faith.
In fact, a judicious reading of said Art. 448 will readily
show that the landowner’s exercise of his option can only take
place after the builder shall have come to know of the intrusion
— in short, when both parties shall have become aware of it.
Only then will the occasion for exercising the option arise, for it
is only then that both parties have been aware that a problem
exists in regard to their property rights.
(23) Writ of Demolition
Esperanza Sales Bermudez v. Helen S. Gonzales,
et al. and Court of Appeals
GR 132810, Dec. 11, 2000
FACTS: Petitioner submits that the lower court gravely
abused its discretion when it issued a writ of demolition without
244
CIVIL CODE OF THE PHILIPPINES
Art. 449
allowing her to prove her rights as a “builder in good faith’’
under Art. 448.
At the outset, it is necessary to state that in an appeal
by certiorari to this Court (Supreme Court), only questions of
law may be raised. For a question to be one of law, it must
involve no examination of the probative value of the evidence
presented by the litigants or any of them. This Court is not a
trier of facts.
In this appeal, the issue is one of law. Did the Court of
Appeals err when it refused to issue a writ of certiorari?
HELD: Yes, it did err. For at the heart of this case is a
factual controversy (i.e., “When was the house subject of the
writ of demolition built?’’) which the trial court must first determine before issuing a writ of demolition. When it failed to
do so, it disregarded basic principles of due process. Such error
may be corrected by a writ of certiorari.
Before demolition could be effected, the parties concerned
should at least be given a chance to be heard concerning the
interest they claim to possess on said properties. If demolition
is involved, there must be a hearing on the motion and due
notice. The right to a hearing includes the right of the party
interested to present his own case and to submit evidence in
support thereof. The trial court denied petitioner this right. The
trial court committed grave abuse of discretion as it evaded and
virtually refused to perform a positive duty enjoined by law.
With the petition granted, the Court of Appeals’ decision
is reversed, and the writ of demolition issued by the lower court
(RTC Tarlac Branch 65) set aside — the case is remanded to
the court of origin for determination of the question of when the
house, subject of the writ of demolition, was actually built and
when any additions, renovations, and improvements thereon
were made, and whether petitioner has the right to be compensated or reimbursed for its value, with instruction that the court
proceed with all deliberate dispatch.
Art. 449. He who builds, plants or sows in bad faith on
the land of another, loses what is built, planted or sown
without right to indemnity.
245
Art. 449
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Effect of Building, Planting or Sowing in Bad Faith
— Loss of Object Without Indemnity
See Comments under Art. 451.
(2) Case
Arada Lumungo, et al. v. Asaad Usman, et al.
L-25359, Sep. 28, 1968
FACTS: Jose Angeles purchased a parcel of land while it
was still under litigation between two parties. In the meantime,
he planted coconut trees thereon. If eventually, Angeles loses
the land in favor of the prevailing party, would he (Angeles),
be entitled to reimbursement for the value of said coconut
trees?
HELD: Angeles is not entitled to reimbursement, for he
was a purchaser and possessor of the land in BAD FAITH. Said
coconut trees are not necessary expenses for preservation, which
a builder, planter, or sower, even if in bad faith, may recover
under Arts. 452 and 546 of the Civil Code. The applicable provision is Art. 449 which states that “he who builds, plants, or sows
in bad faith on the land of another, loses what is built, planted,
or sown without right to indemnity.”
(3) Applicability of the Article to Growing Crops
Art. 449 applies, in the case of planting or sowing, only
to growing or standing crops, not to gathered crops, which are
governed by Art. 443. (See Dizon v. Rivera, CA, 39 O.G. 1744).
(4) Some Cases
Felices v. Iriola
L-11269, Feb. 28, 1958
FACTS: Within five years after he had acquired a homestead patent, S sold said homestead to B. Having been informed
that such a sale was void, S sued B for the recovery of the land.
246
CIVIL CODE OF THE PHILIPPINES
Art. 449
During the pendency of the case, B introduced improvements
on the land. Should B be considered a possessor and builder
in bad faith?
HELD: Yes, B should be considered a possessor and
builder in bad faith. Ordinarily, since the sale is void, both
sellers and buyers must be considered in bad faith, and in view
of their pari delicto (mutual guilt), the law generally would regard both as if they were in good faith. BUT in this particular
case, the improvements were introduced AFTER (not before)
the pendency of the case for recovery. It is clear that B must
be regarded as a possessor in bad faith.
Leonardo Santos v. Angel H. Mojica
L-25450, Jan. 31, 1969
FACTS: The parents of Leonardo Santos were possessing
a parcel of land when they were sued in a civil case regarding
the partition of the land and the annulment of certain conveyances of the same. The parents were later ordered to vacate
the lot and deliver its possession to the plaintiffs in the case.
Leonardo, who was not a party-defendant, although he was the
son, owned at that time a house standing on the lot. Despite
the final judgment against his parents, he not only refused to
vacate the premises. He even reconstructed his house into a
bigger one while the case was pending. Issue: Was Leonardo a
builder in good faith?
HELD: Under the facts given, Leonardo, was bound by
the judgment against his parents, being their successor-ininterest. His reconstruction of the house into a bigger one is
deemed to have been made in bad faith, and therefore he loses
the improvement made by him (consisting of the reconstructed
house) to the owners of the land without right to indemnity,
pursuant to Art. 449 of the Civil Code. Said landowners can, of
course, select instead a demolition of said improvement under
Art. 450.
De Leon v. Caluag
L-18722, Sep. 14, 1967
FACTS: The CFI (now RTC) of Quezon City found certain
persons to be builders in bad faith, and ordered them to deliver
247
Arts. 450-451
CIVIL CODE OF THE PHILIPPINES
the improvements to the owner. But the builders appealed,
alleging they had built in good faith and should therefore be
entitled to retention till reimbursed. Pending appeal, are they
entitled to retain?
HELD: No, they are not entitled to retain for the CFI
(now RTC) findings are presumed correct until reversed by the
higher court.
Art. 450. The owner of the land on which anything has
been built, planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be
removed, in order to replace things in their former condition
at the expense of the person who built, planted or sowed; or
he may compel the builder or planter to pay the price of the
land, and the sower the proper rent.
COMMENT:
Rights of Landowner if Builder, Planter, or Sower
is in Bad Faith
See Comments under Art. 451.
Art. 451. In the cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter
or sower.
COMMENT:
(1) The Three Articles on Bad Faith
Example:
If B builds in bad faith a house on O’s land (O being in
good faith), what are the three alternative rights of O?
ANS.: O is allowed to:
(a)
get the house without paying any indemnity for its value
or expenses (but with the obligation to pay under Art. 452
necessary expenses for the preservation not of the house,
but of the land) PLUS damages. (Arts. 449, 451 and 453);
or
248
CIVIL CODE OF THE PHILIPPINES
Art. 451
(b)
demand the demolition of the house, at the builder’s expense, PLUS damages (Arts. 450 and 451); or
(c)
compel the builder to buy the land, whether or not the
value of the land is considerably more than the value of
the house, PLUS damages. (Arts. 450 and 451).
[Note: Notice the punitive provisions, expressly made
to penalize builders, planters, or sowers in BAD faith. (See
3 Manresa 218).].
(2) Cases
Roman Catholic Church v. Ilocos Sur
10 Phil. 1
FACTS: During the Philippine Revolution of 1896, several
squatters entered a parcel of land which they knew belonged
to the Roman Catholic Church, and which had been temporarily abandoned by the latter. After the war, the Church sued to
recover the land and the houses erected thereon.
HELD: The Church wins the case because the squatters
were builders in bad faith, and can therefore be deprived of
their buildings.
De Guzman v. Rivera
4 Phil. 620
FACTS: A purchased a house from B. A knew that the
land was owned by C and that B had built the house in bad
faith. Can A be ejected from the land without first being given
indemnity?
HELD: Yes, because A can be considered a possessor in
bad faith of the land. He did not acquire more rights than what
the seller had.
Ysrael v. Madrid
45 O.G. 2177 (CA), Prom. May, 1949
FACTS: Madrid was leasing a building owned by Ysrael.
During the battle for liberation, the building was completely
burned. Madrid then asked Ysrael to lease the land to him, but
249
Art. 451
CIVIL CODE OF THE PHILIPPINES
the latter refused. Without the owner’s consent, Madrid built
a P20,000 “barong-barong’’ on the land. Ysrael sued to eject
Madrid.
HELD: Madrid can be ejected without indemnification,
because from the facts given, he was a builder in bad faith.
Mindanao Academy, Inc., et al. v. Ildefonso D. Yap
L-17681-82, Feb. 26, 1965
If a buyer introduces improvements on the property after
the filing of a suit against him for the annulment of the sale,
he becomes a builder in bad faith without any right to reimbursement.
(3) Query: On Gathered and Growing Crops
If you plant and grow crops on the farm of your neighbor
knowing fully well that the farm is not yours, what are your
rights with reference to the crops if your neighbor is in good
faith?
ANS.: I distinguish.
(a)
If the crops have already been gathered, then you have
to return the value of the crops, or the crops themselves
minus the expenses essential for their production, gathering, and preservation. (Art. 443).
(b)
If the crops have not yet been gathered, that is, if the crops
are still standing, you completely forfeit them in favor of
the owner of the land, without any right to indemnity (except of course for the necessary expenses for the preservation — not of the crops — but of the land). (Arts. 449, 452).
The forfeiture works because of the principle of accession.
(See 3 Manresa 214-215). These principles were gathered
from the case of Jison v. Fernandez, (S.C.) 2 O.G. No. 5,
492, and the case of Dimson v. Rivera, (CA) 39 O.G. 1744,
where the Court of Appeals, following Manresa, said:
“If at the time possession of the disputed property is
returned to the owner thereof, the crops planted by the
person (in bad faith) losing possession have already been
250
CIVIL CODE OF THE PHILIPPINES
Art. 451
separated, the owner is under obligation to reimburse for
the expenses of production, gathering, and preservation
of the fruits in accordance with Art. 356 of the old Civil
Code (now Art. 443); but, if at the time the owner obtains
possession, the crops have not yet been gathered, the person who planted them in bad faith loses them without
any right to any reimbursement (except for necessary
expenses under Art. 452 for the preservation of the land)
in accordance with Art. 362 (now Art. 449).’’
(4) Rule Applicable if Builder is Enemy Country
In a case, the Supreme Court held that an airfield set
upon private land by the Japanese Army in the Philippines
belongs to the Republic of the Philippines, and not to the owner
of the land. It is wrong to say that the Japanese Army was a
possessor in bad faith and that therefore constructions by said
Army belong to the owner of the land by industrial accession.
This is because:
(a)
In the first place, the rules of the Civil Code concerning
industrial accession are not designed to regulate relations
between private persons and a sovereign belligerent, nor
intended to apply to constructions made exclusively for
prosecuting a war, when military necessity is temporarily
paramount.
(b)
In the second place, international law allows the temporary use by the enemy occupant of private land and buildings for all kinds of purposes demanded by necessities of
war. (Republic v. Lara, et al., L-580, Nov. 29, 1954). As
a matter of fact, the belligerent occupant (the Japanese
Army) had the right even to occupy buildings already
leased to others, for the purpose of occupying the same as
quarters for troops. If at all there was a disturbance, it
was not a disturbance of a mere trespasser (perturbacion
de hecho derecho), but a disturbance as of right (perturbacion de derecho). (Vda. de Villaruel v. Manila Motor Co.,
Inc., L-10349, Dec. 13, 1958).
[NOTE: In the Lara case, the government, in expropriating the land, was not required to pay for the improvements erected by the Japanese Army.].
251
Art. 452
CIVIL CODE OF THE PHILIPPINES
Art. 452. The builder, planter or sower in bad faith is
entitled to reimbursement for the necessary expenses of
preservation of the land.
COMMENT:
(1) Reimbursement for Necessary Expenses to Preserve the
Land
Example:
A builder in bad faith can lose the building, without indemnity for the necessary or useful expenses for the building,
BUT he must be indemnified the necessary expenses for the
preservation of the land because, after all, the true owner would
have borne such expenses anyway, even if nothing had been
built on the land.
(2) Criticism on Art. 452
The opinion has been given that Art. 452 is an inducement, rather than a deterrent to building, planting, and sowing
on another’s land in bad faith. The act is a trespass or forcible
entry, under the law of which, when the trespasser is convicted,
he is liable for the damages suffered by the offended party. In
places where people own small parcels of land, the land being
unirrigated, the preservation and cultivation thereof mean
heavy expenses which may be higher than the value of the
land entered into. In this case, because of Art. 452, a person
may just plant or sow on another’s land because he expects
a higher compensation than what he can get out of the land
entered into. (See 15 L.J. 179).
(3) Refutation of the Criticism
In the first place, the offended party is still entitled to
recover damages. (See Art. 451). This right is not taken away
by Art. 452. In the second place, it is doubtful if irrigation of
an unirrigated parcel can be considered a “necessary expenses
for the improvement of the land.” It is safer to say, it must
be considered a useful improvement. In the third place, even
granting that the person in bad faith will be reimbursed said
252
CIVIL CODE OF THE PHILIPPINES
Art. 453
irrigation expenses, these are all he can recover, and not “a
higher compensation.”
(4) Land Taxes
Note that although “land taxes” are not exactly “necessary expenses” for the preservation of the land, still they are
considered in the category of “necessary expenses” and must be
reimbursed, regardless of the bad faith of the builder, planter,
or sower.
Art. 453. If there was bad faith, not only on the part
of the person who built, planted or sowed on the land of
another, but also on the part of the owner of such land, the
rights of one and the other shall be the same as though both
had acted in good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge
and without opposition on his part.
COMMENT:
(1) Bad Faith on the Part of Both Parties — Reason for the
Law
The bad faith of one neutralizes the bad faith of the other
(3 Manresa 223), so both will be considered in good faith.
(2) Example
On the land of A, B builds a house in bad faith without
A making any objection despite knowledge of the construction.
Since both are in bad faith, it is as if both are in good faith.
Therefore, A has the right to get the house upon payment of
the proper indemnity, or to compel B to buy the land, unless
the value of the land be considerably more than that of the
building, in which case, rent should be given. (See Merchant
v. City of Manila, et al., 11 Phil. 116; Mun. of Oas v. Roa, 7
Phil. 20; Martinez v. Baganus, 28 Phil. 50).
253
Art. 454
CIVIL CODE OF THE PHILIPPINES
Martinez v. Baganus
28 Phil. 50
FACTS: Baganus bought the land of Martinez from the latter’s children, despite the former’s knowledge that the children
had no authority to sell. Later, Baganus introduced improvements on the land. Meanwhile, Martinez did not oppose the
introduction of said improvements, despite his knowledge that
they were being done. ISSUE: What rule should apply with
respect to their rights?
HELD: It is clear that both Baganus and Martinez acted
in bad faith; hence, both must be regarded as having acted in
GOOD FAITH.
(3) Article Applicable to Sales in Violation of the Homestead
Law
Art. 453 applies to sales made in violation of the Homestead Law, so that if a buyer buys a homestead within the
period when it cannot yet be bought, both he and the seller are
in bad faith. So both can be considered in good faith regarding
what has been built, planted, or sown. (See Galero v. Escueta,
et al., [CA] 45 O.G. 4488).
(4) Definition of ‘Bad Faith’
(a)
The landowner is considered in bad faith “whenever the
act was done with his knowledge and without opposition
on his part.” (See 2nd paragraph, Art. 453). A person who
buys land knowing that a construction had been made
thereon by a person other than the owner and who pays
only for the land (and not for the construction) is in the
same category as a landowner who has acted in bad faith.
(See Gongon v. Tiangco, [CA] 36 O.G. 822).
(b)
“Bad faith” on the part of the builder, planter, or sower is
not expressly defined in the law, but by analogy, we may
say that the building, planting, or sowing made knowingly
by one on land not belonging to him and without authority
is done in bad faith. (See Arts. 526 and 527).
Art. 454. When the landowner acted in bad faith and
the builder, planter or sower proceeded in good faith, the
provisions of Article 447 shall apply.
254
CIVIL CODE OF THE PHILIPPINES
Art. 455
COMMENT:
(1) Rule When Landowner is in Bad Faith but the Builder,
Planter or Sower is in Good Faith
Example:
In good faith, a builder, X built a house on the land of O
who was in bad faith. Adjudicate their respective rights.
ANS.: The law says that in a case like this, we have to
apply Art. 447. Therefore, it is as if O built on his land a house
in bad faith with the materials of X. Consequently:
(a)
O must pay for the value of the house plus damages
because of his bad faith;
(b)
If however X prefers to remove or destroy the house,
O would still be liable for damages.
(2) Rule Followed by the Code Commission
The Code Commission followed the opinion of Manresa
in framing this provision (3 Manresa 224) and disregarded the
views of Sanchez Roman (3 Sanchez Roman 151) and Navarro
Amandi (2 Navarro Amandi 87-88). Manresa, commenting on
Art. 447 says that the article uses the words “personally,’’ or
“through another.” The phrase “through another” may well
refer to the owner of materials who in good faith uses them
for BUILDING, PLANTING, or SOWING on someone else’s
land (the landowner who is in BAD FAITH). (See 3 Manresa
223-225).
Art. 455. If the materials, plants or seeds belong to a
third person who has not acted in bad faith, the owner of the
land shall answer subsidiarily for their value and only in the
event that the one who made use of them has no property
with which to pay.
This provision shall not apply if the owner makes use of
the right granted by Article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or
sower, the latter may demand from the landowner the value
of the materials and labor.
255
Art. 455
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Rule When Three Parties are Involved
In this article, three people are involved: the landowner,
the builder (or planter or sower), and the owner of the materials. The rights of the first two remain unaffected, their rights
being established by the preceding articles. The important
thing under this article is the discussion of the rights of the
owner of the materials.
(2) Rights of Owner of the Materials
(a)
If he acted in BAD FAITH, he loses all rights to be indemnified. Moreover, he can even be liable for consequential
damages (as when the materials are of an inferior quality).
(b)
If he acted in GOOD FAITH, he is entitled to reimbursement from the builder (or planter or sower) principally,
since it was the builder (or planter or sower) who FIRST
made use of the materials. In case of insolvency on the
part of the builder, the landowner is subsidiarily liable,
if he makes use of the materials.
[NOTE: The landowner makes use of the materials
only if he appropriates the construction. If he compels the
builder to:
1)
purchase the land;
2)
or to demolish the construction, the landowner does
not make use of the materials, hence, he cannot be
held subsidiarily liable.].
(3) Bad Faith on the Part of the Three Parties
If all the three parties are in bad faith, all must be considered to have acted in good faith. (See 3 Manresa, pp. 226227).
(4) Problem
Pedro in bad faith constructs a house with the materials
of Jose, who is also in bad faith, on the land of Tomas who is
in good faith. Give their rights and obligations.
256
CIVIL CODE OF THE PHILIPPINES
Art. 456
ANS.:
(a)
Since both Pedro and Jose are in bad faith, as between
them, good faith must govern. Hence, Jose, the owner of
the materials, must be reimbursed by Pedro, but in case
Pedro cannot pay, Tomas, the landowner, will not be subsidiarily liable, because as to him, Jose is in bad faith. If
Pedro pays, Pedro cannot ask reimbursement from Tomas
because as to Tomas, Pedro is in bad faith.
(b)
Tomas, the landowner, can ask damages from both;
moreover —
1)
he may appropriate the house for his own, without
payment of any indemnity for useful or necessary
expenses for the house (Art. 459) but with indemnity
for the necessary expenses for the preservation of the
land (Art. 452); or
2)
demand the demolition of the house at Pedro’s expense (Art. 450); or
3)
compel Pedro to pay the price of the land whether the
land is considerably more valuable than the house
or not. (Art. 450).
(5) When Builder May Demand Reimbursement from Landowner
Note that the law says “If the owner of the materials,
plants, or seeds has been paid by the builder, planter or sower,
the latter may demand from the landowner the value of the
materials and labor.” It should be understood however that this
reimbursement may be had only if the landowner profits by the
accession, and not when he does not choose to appropriate the
construction or planting for himself.
Art. 456. In the cases regulated in the preceding articles,
good faith does not necessarily exclude negligence, which
gives right to damages under Article 2176.
257
Art. 457
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Good Faith May Co-Exist With Negligence
It is possible that a person may be in good faith, and also
negligent. In fact, in negligence, there is no intent to do wrong.
On the other hand, bad faith presupposes an intent to cause
damage or prejudice. In case there be negligence, damages for
his culpa will arise under Art. 2176.
(2) Liability for Negligence
Under Art. 2176: “Whoever by act or omission causes
damage to another, there being fault or negligence, is obliged
to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is
called a quasi-delict (culpa aquiliana) and is governed by the
provisions of this Chapter.”
Art. 457. To the owners of lands adjoining the banks of
rivers belong the accretion which they gradually receive
from the effects of the current of the waters.
COMMENT:
(1) Forms of Accession Natural
With this article begins accession natural, the principal
forms of which are:
(a)
alluvium. (Art. 457).
(b)
avulsion. (Art. 459).
(c)
change of course of rivers. (Arts. 461-462).
(d)
formation of islands. (Arts. 464-465).
(2) ‘Alluvium’ Defined
Alluvium (or alluvio) is the soil deposited or added to
(accretion) the lands adjoining the banks of rivers, and gradually received as an effect of the current of the waters. (Ferrer v.
258
CIVIL CODE OF THE PHILIPPINES
Art. 457
Bautista, 49 SCAD 616 [1994]). By law, the accretion is owned
by the owner of the estate fronting the river bank (riparian
owner).
[NOTE: If a river bed gradually changes, the rules on
alluvium can also apply. (Cañas v. Tuazon, 5 Phil. 689).].
[NOTE: Although often used synonymously in connection
with Art. 457, there are technical differences between alluvium
and accretion:
a)
Accretion is the process whereby the soil is deposited,
while alluvium is the soil deposited on the estate
fronting the river bank; the owner of such estate is
the riparian owner. (Heirs of Emiliano Navarro v.
IAC, 79 SCAD 351 [1997].).
b)
Accretion is a broader term because alluvium, strictly
speaking, applies only to the soil deposited on river
banks. It is possible that a soil deposit be made
also on the banks of lakes. In this case, although it
is an accretion, it is not called alluvium, although
the rule as to ownership is the same. Thus, Art. 84
of the Spanish Law of Waters (still in force) states:
“Accretions deposited gradually upon lands contiguous to creeks, streams, rivers, lakes by accessions or
sediments from the waters thereof, belong to the
owners of such lands.”
Director of Lands v. CA
GR 48265, Jan. 7, 1987
Lands formed by accretion belong to the riparian
owner. Consequently, the Director of Lands has no jurisdiction over it and any conveyance made by him of any
private land is null and void.
[NOTE: Corpus Juris makes mention of the terms
reliction and dereliction, which refer to the land brought
forth by the withdrawal of the water by which it had been
covered. (45 C.J., p. 542).].
259
Art. 457
CIVIL CODE OF THE PHILIPPINES
(3) Essential Requisites of Alluvium
(a)
The deposit should be gradual and imperceptible (as a
process);
(b)
Cause is the current of the river (and not due to works
expressly designed for the purpose);
(c)
Current must be that of a river (if a lake, the Spanish
Law of Waters must apply; if the sea, the deposit belongs
to the State). (Gov’t. of the Phils. v. Cabangis, 53 Phil.
112).
(d)
The river must continue to exist (otherwise, if the river
disappears, Art. 461 and not Art. 457 should apply). (See
Pinzon v. Rama, [CA] 2 O.G. No. 3, p. 307).
(e)
The increase must be comparatively little, and not, for
example, such as would increase the area of the riparian
land by over one hundred fifty per cent. (De Lasa v. Juan,
et al., CA, L-3076-R, May 25, 1950).
[NOTE: It is not necessary, however:
1)
that the riparian owner should make an express act
of possession, the accession being automatically his
the moment the soil deposit can be seen. (See Cortez
v. City of Manila, 10 Phil. 567; Roxas v. Tuason, 9
Phil. 408; 3 Manresa 236).
2)
that the riparian owner has completely paid for the
value of the riparian estate (in case of purchase),
as long as he has already the equitable or beneficial
title. (See Director of Lands, et al. v. Rizal, et al.,
L-2925, Dec. 29, 1950; 16 Lawyer’s Journal 363).
[NOTE: Alluvium, caused by artificial means
is prohibited and penalized, unless made with the
authorization of the Government. (See Com. Act No.
383). If the alluvium is caused by “fish traps” in a
river, would this be artificial alluvium? No, unless
there was a deliberate desire to cause alluvium. (Zapata v. Director of Lands, L-17645, Oct. 30, 1962).].
260
CIVIL CODE OF THE PHILIPPINES
Art. 457
Reynante v. CA
207 SCRA 794
(1992)
Accretion benefits a riparian owner when the following requisites are present:
(1)
That the deposit be gradual and impercepti-
ble;
(2) That it resulted from the effects of the current
of the water; and
(3) That the land where accretion takes place is
adjacent to the bank of a river.
Failure to register the acquired alluvial deposit by accretion for a period of 50 years subjects said accretion to acquisition thru prescription by third persons.
(4) Reasons Why Alluvium Is Granted the Riparian Owner
(a)
to compensate him for the loss he may suffer due to erosion or the destructive force of the water and danger from
floods;
(b)
to compensate him because the property is subject to encumbrances and legal easements (Cortez v. City of Manila,
10 Phil. 567; Guison v. City of Manila, 40 O.G. No. 19, p.
3835);
(c)
the interests of agriculture require that the soil be given
to the person who is in the best position to cultivate the
same (3 Manresa 231-232);
(d)
since after all, it cannot be said with certainty from whom
the soil came (indeed, the identification of previous owners
is impossible), it may just as well be logically given to him
who can best utilize the property. (See 2 Navarro Amandi
93; Cortez v. City of Manila, 10 Phil. 567).
261
Art. 457
CIVIL CODE OF THE PHILIPPINES
ILLUSTRATIVE CASE:
Guizon v. City of Manila,
40 O.G. No. 19, p. 3835
(CA) affirmed in 72 Phil. 437
A house near a river was enclosed by a high wall which
protected the estate. Should the alluvium immediately outside
the wall belong to the owner of the house?
HELD: No, the alluvium here does not belong to the
owner of the house or land because the reason why alluvium
is allowed by the law does not exist here. The presence of the
wall hardly makes possible any loss from the waters that the
estate may suffer. Hence, the alluvium cannot be given to the
owner of the estate.
(5) Accretion on the Bank of a Lake
Accretions on the bank of a lake, like Laguna de Bay,
belong to the owners of the estate to which they have been
added. (See Gov’t. v. Colegio de San Jose, 53 Phil. 423 which
applied the Spanish Law of Waters).
Republic of the Phils. v. Lat Vda. De Castillo, et al.
GR 69002, June 30, 1988
Lakeshore land or lands adjacent to the lake must be
differentiated from foreshore land or that part of the land adjacent to the sea which is alternately covered and left dry by the
ordinary flow of the tides. Such distinction draws importance
from the fact that accretions on the bank of a lake belong to
the owners of the estate to which they have been added, while
accretion on a sea bank still belongs to the public domain, and
is not available for private ownership until formally declared
by the government to be no longer needed for public use.
(6) Accretion on the Bank of an Island Formed in a Nonnavigable River
This accretion also belongs to the owner of the island. (See
Banatao v. Dabbay, 38 Phil. 612).
262
CIVIL CODE OF THE PHILIPPINES
Art. 457
(7) Accretion on a Sea Bank
Neither Art. 457 of the Civil Code, nor the Spanish Law
of Waters of Aug. 3, 1866 can apply here because accretion on
a sea bank is neither an accretion on a river bank or a lake
bank. (See Pascual v. Angeles, 13 Phil. 441). Manila Bay is a
sea, for a bay is a part of the sea, being a mere indentation of
the same. Thus, accretion caused by the action of Manila Bay
still belongs to the public domain, and Art. 457 cannot apply.
(Faustino Ignacio v. Dir. of Lands and Laureano, L-12958, May
30, 1960; see also Gov’t. v. Cabangis, 53 Phil. 112; Ker and Co.
v. Cauden, 223 U.S. 268).
(8) Effect of Public Service Constructions or Easements on
River Banks
(a)
If a public service construction, like a railroad or a road,
is made on a river bank, it is evident that the owner of
the land can no longer be considered a riparian owner.
Therefore, it is the government or the railroad company
which will own the accretion. (See 3 Manresa 232). Here,
the strip of land used is no longer the property of the
former riparian owner.
(b)
If instead of a public service construction, there is only an
easement for the benefit of navigation, floatage, fishing and
salvage, the right of the riparian owner to the accretion subsists, because in easements, the owner of the servient estate
does not lose his ownership over the portion occupied. (See
3 Manresa 233). It is believed that this principle remains
even if under the new Civil Code, the last paragraph of Art.
638 states that: “If it be necessary for such purpose to occupy land of private ownership, the proper indemnity shall
first be paid.” Payment of the indemnity does not extinguish
ownership over the land. (See for reference Ayala de Roxas
v. City of Manila, 9 Phil. 215).
(9) Loss by Alluvium Not Affected by Registration Under
the Land Registration Act
In one case, the land owned by a riparian owner, and covered by a Torrens Title, gradually diminished, while the land on
the opposite bank gradually increased due to the current of the
river. It was alleged by the registered owner that the land added
263
Art. 457
CIVIL CODE OF THE PHILIPPINES
to the opposite side still remains his by virtue of the Torrens
Certificate of Title. Upon the other hand, the benefited owner
countered that no protection was offered by the Title against
alluvium. The Supreme Court rendered judgment against the
registered owner (and in favor of the opposite owner) on the
ground that accretions of the character of alluvium are natural
incidents of land bordering running streams, and are therefore
not affected by registration laws. (Payatas Estate Improvement
Co. v. Tuason, 53 Phil. 55). Indeed, registration does not protect
the riparian owner against the diminution of the area of his land
thru gradual changes in the course of the adjoining stream. (C.N.
Hodges v. Garcia, L-12730, Aug. 22, 1960).
It is thus clear that if a portion of land protected by a Torrens Certificate of Title is lost by alluvium, the registered owner
is NOT protected by the registration: he loses said portion.
(Payatas Estate Improvement Co. v. Tuason, 53 Phil. 65). Upon
the other hand, an alluvial deposit does NOT automatically
become registered land simply because the lot which receives it
is covered by a Torrens Title. Although the owner of the land on
which the alluvial deposit is made becomes automatically the
owner of said deposit, the law not requiring any act of possession on his part from the moment the deposit becomes manifest,
still ownership of a piece of land is one thing, and registration
under the Torrens System of that ownership is quite another.
Ownership over the accretion received is governed by the Civil
Code. Imprescriptibility of registered land is provided in the
registration law. In order that said alluvial property may be
entitled to the protection of imprescriptibility, the same must
be placed under the operation of the Land Registration Law. An
unregistered alluvial property is therefore subject to acquisition
through prescription by third persons. (Grande, et al. v. Court
of Appeals, et al., L-17652, June 30, 1962).
(10) Subdivision Plan for Land Obtained by Accretion Not
Enough to Make the Land Registered Land
Republic v. Heirs of Luisa Villa Abrille
L-39248, May 7, 1976
FACTS: A parcel of land with a Torrens Title was adjoining a river that eventually dried up. The lot owner claimed
264
CIVIL CODE OF THE PHILIPPINES
Art. 458
that the dried-up river bed was his by accretion, so he drew up
a subdivision plan that included the river bed. The plan was
approved both by the Land Registration Commission and by
the CFI, and two titles were issued, there being two parcels in
the subdivision. State now sues to have the subsequent title
over the river bed cancelled. Can cancellation be made?
HELD: Yes, for to make the former river bed come under
the Torrens System, the ordinary approval of a subdivision
plan is not sufficient; there must be a judicial application for
the registration of the land.
(11) Bar
Subsequent to the original registration under the Torrens System of a parcel of land bordering a river, its area was
increased by accession. Having been acquired subsequent to
the registration proceedings, the additional area was NOT
INCLUDED in the technical description appearing on the certificate of title. May such additional area be acquired by third
persons through adverse possession? Why?
ANS.: Yes, for while the additional area automatically
became property of the owner of the original parcel (by accession), still, said area did not automatically become registered
land; hence, the same may be acquired by prescription. (See
Grande, et al. v. Court of Appeals, et al., supra).
(12) Effect of Purchase of a Lot on the Installment Plan
If X buys a parcel of land on the installment plan (ownership over the land being reserved by the owner till after full
payment), who will own the alluvial deposit that may accrue
before full payment is made?
ANS.: The buyer, for it is he who has the beneficial and
equitable title over the property. (See by analogy Director of
Lands v. Rizal, L-2925, Dec. 29, 1950 — a case involving the
purchase of friar lands under Act 1120).
Art. 458. The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the natural decrease
of the waters, or lose that inundated by them in extraordinary floods.
265
Art. 458
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Land Adjoining Ponds and Lagoons
Example:
A’s land bordered a lagoon. Because of an extraordinary
flood, a portion of the land was inundated (covered with water).
Has he lost said portion of land?
ANS.: No, because of Art. 458. However, in time, he may
lose it by prescription. (See 3 Manresa 235-236).
[NOTE: Strictly speaking, Art. 458 does not deal with
alluvium, for there is no deposit of soil sediment.].
(2) When Art. 458 Is Applicable and When Not Applicable
Art. 458 applies when the estate adjoins:
(a)
a pond;
(b)
or a lagoon.
It does not apply when the estate adjoins a lake, a river, a
creek, or other streams. (Gov’t. of the P.I. v. Colegio de San Jose,
53 Phil. 423). In such a case, the land left uncovered reverts
to the adjoining estate which owned it at the very beginning.
(Gov’t. v. Colegio de San Jose, supra).
(3) Definitions
(a)
Pond — a body of stagnant water without an outlet, larger
than a puddle and smaller than a lake, or a like body of
water with a small outlet. (Black’s Law Dictionary, 3rd
Ed., p. 1377).
(b)
Lagoon — a small lake, ordinarily of fresh water, and
not very deep, fed by floods, the hollow bed of which is
bounded by the elevations of the land. (Encyclopedia,
Juridical Española, Vol. 21, pp. 124-125, quoted with
approval in Gov’t. v. Colegio de San Jose, supra).
(c)
Lake — a body of water formed in depressions of the
earth; ordinarily fresh water, coming from rivers, brooks,
or springs and connected with the sea by them. (Ibid.).
266
CIVIL CODE OF THE PHILIPPINES
Art. 459
Example: The Laguna de Bay, since it fulfills the
definition of a lake and is connected with Manila de Bay
and the outer seas by the Pasig River. (Ibid.).
(4) Cases
Government v. Colegio de San Jose
53 Phil. 423
FACTS: This case involved the ownership of a strip of land
adjoining the Colegio de San Jose and the Laguna de Bay, and
which was claimed both by the College and the Government.
Both admitted that the strip was formerly covered by water
(though originally owned by the College) but since the Bay
receded, it was now uncovered. The government tried to apply
Art. 458 which states that the adjoining estate (the College)
does not acquire the land left dry by the natural decrease of
the waters.
HELD: The government is wrong. It would have been
correct had the Laguna de Bay been a pond or a lagoon, but it
is a lake, and therefore not governed by Art. 458. Instead, the
Spanish Law of Waters should apply, and under said law, the
College acquires ownership. Art. 77 of said law states: “Lands
accidentally inundated by the waters of lakes, or by creeks, rivers, or other streams shall continue to be the property of their
respective owners.” This is because no real alluvial deposit is
made.
Paredes v. Laureta
(CA) GR 7748, Mar. 24
When a parcel of land is accidentally inundated and for
a period of time said land becomes part of the river bed, such
fact does not permanently deprive the owner of the ownership,
and ownership is reverted to the owner when the land subsequently appears, and is left dry by the construction of river
control work.
Art. 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a known portion
of land and transfers it to another estate, the owner of the
267
Art. 459
CIVIL CODE OF THE PHILIPPINES
land to which the segregated portion belonged retains the
ownership of it, provided that he removes the same within
two years.
COMMENT:
(1) Avulsion
This Article treats of avulsion.
(2) ‘Avulsion’ Defined
(a)
the process whereby the current of a river, creek, or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate. (See Art.
459).
(b)
the removal of a considerable quantity of earth upon or
annexation to the land of another, suddenly and by the
perceptible action of the water. (See Wood v. McAlpine,
85 Kan. 657).
[NOTE: It is also called the “force of the river,” since
avulsion implies a violent tearing or breaking away. Avulsion may also be referred to as “delayed accession” in the
sense that if the owner abandons the soil involved, or fails
to remove the same within two years, the land to which it
has been attached acquires ownership thereof.].
(3) Definition of River, Creek, Torrent
(a)
River — a natural stream of water, of greater volume than
a creek or rivulet flowing, in a more or less permanent
bed or channel, between defined banks or walls, with a
current which may either be continuous in one direction
or affected by the ebb and flow of the tide. (Black’s Law
Dictionary, 3rd Ed., p. 1564, citing with approval, Howard
v. Ingersoll, 13 How. 391).
(b)
Creek — a small stream less than a river. (Baker v. The
City of Boston, 12 Pick 184); a recess or inlet in the shore
of a river, and not a separate or independent stream,
though it is sometimes used in the latter meaning.
(Schemerborn v. Railroad Co., 38 N.Y. 103).
268
CIVIL CODE OF THE PHILIPPINES
(c)
Art. 459
Torrent — a violent, rushing, or turbulent stream (Webster).
(4) Distinctions Between Alluvium and Avulsion (Bar Question)
ALLUVIUM
AVULSION
(1)
the deposit of the soil here
is gradual.
(1) sudden or abrupt process
may be seen. (Canas v.
Tuason, 5 Phil. 688).
(2)
soil cannot be identified.
(2) identifiable or verifiable.
(3)
belongs to owner of property
to which it is attached.
(3) belongs to owner from
whose property it was
detached.
[NOTE: In the absence of evidence that the change in
the course of the river was sudden or that it occurred through
alluvium, the presumption is that the change was gradual and
was caused by alluvium and erosion. (Payatas-Estate Improvement Co. v. Tuason, 53 Phil. 55; Hodges v. Garcia, L-12730,
Aug. 22, 1960).].
(5) Decided Case
Martinez v. Mun. of San Mateo
6 Phil. 3
FACTS: A and B owned lands fronting a river. Thru the
force of the current, an identifiable portion of B’s estate was
suddenly transferred to A’s land. Who owns said portions?
HELD: B, the original owner since this is a case of avulsion.
[NOTE: Under the Civil Code, to retain his ownership, B
must remove (not merely claim) the property.].
269
Art. 459
CIVIL CODE OF THE PHILIPPINES
(6) Comments of the Code Commission RE “Removal Within
Two Years”
Under Art. 368 of the old Civil Code, the clause “provided
that he removes the same within two years” was not found.
Under Art. 459 of the new Civil Code, the clause has been
inserted. The reasons for the insertion of the clause appear to
be the following (as stated by the Code Commission):
“(a) The segregated portion is usually very small. It is thus
useless to the owner of the land from which it originated
because of the distance between the two lands. Therefore,
after two years, if it is not removed by the original owner,
it should be adjudicated to the owner of the land to which
the portion has been transferred.
It may be asked whether the removal is practicable.
The answer is that the known portion of land may either
be sold to persons who may have use for it, such as for
filling a low place, or the original owner may restore it to
his land.
“(b) If the land is of rather large area, and its removal cannot be effected, a reasonable interpretation of the article
would require that the original owner should make a
claim for its value within two years, otherwise, he will
be deemed to have renounced his right thereto.
“(c) The principle involved is similar to that underlying the
next article (460), whereby the owner of uprooted trees
must claim them within six months.
“(d) There is a peculiar situation created by the perpetual
retention of ownership by the original owner of this small
portion of land, which has been segregated and transferred to another estate. The original owner would have a
right to enter the other estate at any time, and this may
create ill-feeling between two neighbors.
“(e) Even if there should be established an easement of right
of way in favor of the original owner, such right of way
must, of course, be paid, according to Art. 649. In most
cases, the cost of the easement of right of way, would
probably be too much for the possible benefit that the
270
CIVIL CODE OF THE PHILIPPINES
Art. 459
original owner may derive by cultivating the segregated
small portion, if it is tillable at all.
“(f)
Legal absurdities would otherwise be created.
“(g) One of the purposes of fixing a period within which the
original owner may claim the portions segregated is to
prevent its becoming permanently attached, physically
speaking, to the land to which it has been transferred.
The original owner should therefore remove it as soon as
possible and within two years.
“(h) For all the above reasons, the Code Commission preferred
the solution found in some foreign civil codes, specifying a
period within which the original owner must remove the
segregated portion.
For all the foregoing reasons, the Code Commission
cannot agree to the elimination of the period of two years
within which the owner of the segregated portion must
remove or claim the same. Thereafter, if he has abandoned
his right, the portion belongs to the owner of the estate
to which it has been transferred by the river.’’ (Memorandum of the Code Commission, Feb. 17, 1951, 8 Lawyer’s
Journal, 217).
(7) Comment on the Propositions Stated by the Code Commission
(a)
The Code Commission states that if removal is not made
within two years, the segregated land should belong to the
owner of the land to which it has been attached. It may
be so, but it would have been better if this intention (i.e.,
to make avulsion a case of “delayed accession”) had been
expressly or clearly stated in the law itself, otherwise,
some may claim that the property itself has become res
nullius or it has become part of public dominium.
(b)
The Code Commission has stated that “if the land is of
rather large area, and its removal cannot be effected, a
reasonable interpretation of the article would require
that the original owner should make a claim for its value,
within two years, otherwise he will be deemed to have
renounced his right thereto.” It would seem that this is
271
Art. 459
CIVIL CODE OF THE PHILIPPINES
a far-fetched view of the law, for the law says “remove”
and not merely “claim.” Moreover, why should a claim be
made for its value, when after all, for the period of two
years, ownership is recognized in the claim? Thirdly, the
law does not distinguish whether the portion segregated
be large or small, nor does it excuse non-removal on account of practical difficulties. It is thus believed that if
“removal” is not made, ownership would be lost by one,
and acquired by another (the person upon whose land the
soil has been deposited).
(c)
The Code Commission has stated that “the principle
involved is similar to that underlying the next article
(460) whereby the owner of uprooted trees must claim
them within six months.” Why then is the word “remove”
used, instead of “claim”? Moreover, why may “remove” be
interpreted to mean “claim for its value” and not merely
“claim,” if indeed the principles involved be similar?
(8) Queries
(a)
Suppose the detached portion is placed on TOP and not
merely alongside or adjacent to another’s land, will the
article apply?
ANS.: In avulsion, it is essential that the detached
portion be known or identifiable. Therefore, mere placing on top will not make the article inapplicable as long
as identification is still possible. But if because of some
force, say continuous rain, the two have so mixed with
each other that identification cannot take place, the
article should not apply. In this case, the principles of
commixtion or confusion (although generally used only in
connection with personal property) should, it is believed,
apply.
(b)
Suppose the detached portion is not attached to another’s
land but simply is in the middle of the river, what rule
applies?
ANS.: Ownership still remains with the person from
whose land it had been detached, as in Art. 463. (See 3
Manresa 347).
272
CIVIL CODE OF THE PHILIPPINES
Art. 460
Art. 460. Trees uprooted and carried away by the current
of the waters belong to the owner of the land upon which
they may be cast, if the owners do not claim them within
six months. If such owners claim them, they shall pay the
expenses incurred in gathering them or putting them in a
safe place.
COMMENT:
(1) Rule on Uprooted Trees
Example:
Because of the force of the river current, some trees on
the estate of A were uprooted and cast on the estate of B. Who
owns the trees?
ANS.: A should still be considered as the owner of the
uprooted trees, but if he does not claim them within six months,
B will become the owner. If A makes the claim, he will have to
shoulder the expenses for gathering or putting them in a safe
place. Failure to make the claim within six months will bar
any future action to recover the trees.
(2) Rule if Trees Have Been Transplanted
In the example given above, even if the trees have been
transplanted by the owner of the land upon which they have
been cast on his own land — ownership still pertains to the
person who lost the trees provided that the claim was made
properly. (See 3 Manresa 244). Incidentally, the owner of the
land upon which the trees have been cast, does not have to
wait for six months before he can temporarily set them aside
to make proper use of his own land.
(3) Effect if Claim Is Made But Trees Are Not Removed
If say within 4 months a claim is made, but no steps
are yet taken to recover the trees, may an action still be filed
afterwards for recovery of the trees?
ANS.: It is submitted that the answer is YES, provided the
action is brought within the period set by law for prescription
273
Art. 461
CIVIL CODE OF THE PHILIPPINES
of movable (since uprooted) property. (Art. 1140 — 4 years for
ordinary prescription). The six-month period given in Art. 460
should be considered only as a condition precedent; in other
words, A has to make the claim within six months. The recovery (as distinguished from the claim) can be made within the
period for prescription. If no claim is made within six months,
the ownership changes.
(4) Article Applies Only to Uprooted Trees
If instead of being uprooted, the trees still remain attached to land that has been carried away, it is Art. 459 that
must govern. (See 3 Manresa, pp. 243-244).
(5) Must Owner of Land Upon Which the Uprooted Trees
Have Been Cast Be Given Compensation?
It depends. If he has incurred expenses for preserving
them, as when he gathered them in a safe place for eventual
return, or when he transplants them, only for preservation
purposes, he is doubtless entitled to indemnification. If he has
done nothing, he cannot demand indemnification (See 3 Manresa, pp. 243-244) unless he has suffered in any way, and the
real owner has benefited, in that, for example, they were not
carried away by the current. (See Art. 22).
Art. 461. River beds which are abandoned through the
natural change in the course of the waters ipso facto belong
to the owners whose lands are occupied by the new course
in proportion to the area lost. However, the owners of the
lands adjoining the old bed shall have the right to acquire
the same by paying the value thereof, which value shall not
exceed the value of the area occupied by the new bed.
COMMENT:
(1) Change of Course of Rivers
Example:
Jose’s and Maria’s estates face each other and adjoin a
river. Later, the river naturally changes its course and the river
274
CIVIL CODE OF THE PHILIPPINES
Art. 461
bed is abandoned. The new river bed happens to be in the land
of Maximo. Who owns the abandoned river bed?
ANS.: Maximo owns the ENTIRE abandoned river bed to
compensate him for the loss of the land now occupied by the
new river bed.
[NOTE: “In proportion to the area lost” has no application
if only one owner has lost; here, he gets the entire abandoned
river bed. The “proportion” applies when there are two or more
owners who have lost a portion of their lots; in this case, the
ENTIRE abandoned bed will go to them proportionately, that
is, in proportion to the area each has lost.].
[NOTE: Under the old law (Art. 370 of the old Civil Code),
the adjoining riparian owners became the owners of the abandoned bed; but under the new Civil Code, said bed belongs to
the owner of the property the river now occupies. In justifying
the change, the Code Commission said: “The purpose of this
provision is to compensate for the loss of the land occupied by
the new bed. It is more equitable to compensate the actual losers than to add land to those who have lost nothing.” (Report
of the Code Commission, p. 96).].
(2) Bar Questions
(a)
A and B each own a parcel of land on opposite sides
of a river. The river changed its course and passed thru
D’s land not adjoining either A’s or B’s land. As a result
of this change of course, D lost 10 hectares of land. Assuming that the area of the abandoned river bed between
the lands of A and B is also 10 hectares, who is entitled
to the accession, and why?
ANS.: D, in view of his loss. (Art. 461).
(b)
The Director of Lands sold to A 24 hectares of public land
at P200 per square meter. The land was adjoining a river,
which, after the sale changed its course and left its bed
dry, the area of which is two hectares. The purchaser A
claimed and occupied this portion, alleging the right of
accretion. The Director of Lands claimed that the sale
covered only 24 hectares, hence, A has no right to the two
hectares. Decide.
275
Art. 461
CIVIL CODE OF THE PHILIPPINES
ANS.: Under the old Law, A would be correct but
under the new Civil Code a distinction has to be made.
If the river in its new course occupies private land, then
the owner of the private land becomes the owner of the
abandoned river bed without prejudice to A’s right to buy
it from him. If the new river bed is on land of the public
domain, the abandoned river bed is of public domain, and
is thus, in a sense, owned by the government. (See Art.
461).
(c)
A owns a parcel of land adjoining the bank of the Pampanga River. The land on the opposite bank is owned by
B. The river suddenly changed its natural course, and the
new river bed passed through more than one-half of the
land of B.
The ownership of the abandoned river bed is claimed
by:
1)
A as owner of the adjacent land;
2)
B who lost more than one-half of his land to
the new river bed; and
3)
The government on the ground that the abandoned river bed is part of the public domain.
Determine the rights, if any, of each of the claimants.
Explain fully, giving reasons.
ANS.: It is clear under Art. 461 that B ipso facto
owns the abandoned river bed in proportion to the area
which B lost (unless of course the government takes steps
to bring back the river to its old course). Insofar as there is
an excess, the excess still belongs to the property of public
dominion. Under the law, the owners of the adjacent or
adjoining lands are given in the “interest of agriculture”
the right to reimburse the “prejudiced owner” the value
of the area lost, hence, strictly speaking, A, as owner of
the adjacent land is given the right to so reimburse B for
HALF of the abandoned river bed (HALF only, because it
should be remembered that B himself is an adjacent owner, entitled to the same right of reimbursement). While it
276
CIVIL CODE OF THE PHILIPPINES
Art. 461
may seem more just, under a liberal interpretation of the
law, to refuse A the right of reimbursement since after all
B, himself an adjacent owner, is in a position to cultivate
the abandoned river bed, and since he was the one who
lost over half of his land; and while indeed the right of
reimbursement under Art. 461 obviously contemplates
a situation where the landowner who lost land is NOT
himself an adjacent owner; still it should not be forgotten
that A himself has been deprived of the use of the river,
and to partly indemnify him, he should be given the right
to pay for the value of the HALF hereinabove referred to.
Equity cannot afford to be one-sided.
(3) Requisites for Art. 461 (Change of River Bed) to Apply
(a)
The change must be sudden in order that the old river
bed may be identified. (There must be sufficient evidence
showing that the river changed its course not gradually
or imperceptively, but abruptly.) (Eguia v. Eguia, CA-G.R.
No. 2575-R, June 9, 1949).
(b)
The changing of the course must be more or less permanent, and not temporary overflooding of another’s land.
(Decision of the Supreme Court of France on Feb. 26,
1896).
(c)
The change of the river bed must be a natural one, i.e.,
caused by natural forces (and not by artificial means such
as those used by private individuals authorized by the
government — in which case the State may give the old
river bed to the persons responsible for the change. (See
3 Manresa 251-252).
(d)
There must be a definite abandonment by the government. If the government shortly after the change decides
and actually takes steps to bring the river to its old bed,
Art. 461 will not apply, for here, we cannot say that there
was an abandonment. The government is not compelled
to stand by idly and let nature take its course. Thus, the
government may redirect the course even in the face of
opposition from those who may be affected. (Panlilio v.
Mercado, 44 Phil. 695).
277
Art. 461
(e)
CIVIL CODE OF THE PHILIPPINES
The river must continue to exist, that is, it must not completely dry up or disappear. If indeed there is a complete
drying up, who would own the dried up river bed? Under
the old Code, the Court of Appeals, applying Art. 370 (old
Code) to this case of disappearance, held that the old bed
belonged to the riparian owners if the government did
not claim it. Under the new Code, it would seem that it
should belong to public dominion, since no private lands
are injured and since as a rule under Art. 502, a river bed
belongs to public dominion, unless otherwise provided by
the law. (See Pinzon v. Rama, [CA] 2 O.G. [Rep.], No. 3,
p. 307).
(4) Reason for Inserting the Phrase ‘Ipso Facto’
According to Dean Francisco Capistrano, member of the
Code Commission, “the words ipso facto were inserted in order
to make it clear that the rule applies by the mere fact of the
occurrence of a natural change in the course of the waters. The
Code Commission was of the opinion that the contrary doctrine
of the case of Panlilio v. Mercado, supra (concerning the right
of the government to take steps to bring back the river to its
old course) was erroneous and should not be followed.”
The validity of this observation is doubted by Justice
J.B.L. Reyes and Justice Ricardo C. Puno who have written
that: “The validity of this observation may be doubtful. To
illustrate: Suppose the government spent huge sums for the
building of a dam for the benefit of the public, then a change
of bed occurs. Would not the government be entitled to bring
back the river to the old course? It would seem unreasonable
to require the government to go thru the process of eminent
domain proceedings before doing so.”
The writer is inclined to agree with Reyes and Puno for
“abandonment” implies an “intent not to return.” If steps are
undertaken to restore the river to its original course, there is
no “abandonment.”
What “ipso facto” (automatically) should mean as used
in Art. 461 is that the prejudiced landowner automatically
becomes the owner of the abandoned river bed, once the condi278
CIVIL CODE OF THE PHILIPPINES
Art. 461
tions stated in the article are fulfilled or manifest, without the
necessity of any action or exercise of possession on their part.
In other words, their mode of acquisition would be by virtue of
the law. (See Villanueva v. Claustro, 23 Phil. 54). The acquisition would thus be ipso facto — provided there is really an
abandonment.
(5) Proposal of then Congressman Arturo Tolentino (later
Senate President) and the Answer of the Code Commission
Dr. Arturo Tolentino has proposed the repeal of Art. 461
and the restoration of Art. 370 of the old Civil Code which
reads:
“Art. 370 — Beds of rivers abandoned because of a
natural change in the course of the water belong to the
owners of the lands bordering thereon throughout their
respective extents. If the abandoned bed divides estates
belonging to different owners, the new dividing line shall
be equidistant from the former boundaries.”
The Code Commission has answered the criticism in this
way:
“The sources of Art. 461 of the new Code are Art.
563(3) of the French Civil Code; and the Codes of Guatemala (Art. 607), Louisiana (510), Holland (647), other
Codes, as well as Art. 412 of the Spanish Project of Civil
Code of 1851. The reason ... in preferring this rule is: The
new solution is by way of compensation for the loss of the
land occupied by the new bed. It is believed more equitable
to compensate the actual losers than to add land to those
who have lost nothing.
“According to Manresa, Art. 370 of the Spanish Civil
Code is aimed to promote the interest of agriculture,
because the riparian owners of the old course can better
cultivate the same. The reply to this is that they may
purchase the same, so as to compensate the proprietors
whose lands are occupied by the new bed, and who have
actually suffered loss as the new bed becomes of public
dominion, as per Art. 462 of the new Code.” (Memoran279
Art. 462
CIVIL CODE OF THE PHILIPPINES
dum of the Code Com., Feb. 19, 1951; 16 Lawyers’ Journal
270).
[NOTE: ‘‘The rule of our present Art. 461 is that of Art.
563 of the French Civil Code. It is interesting to note that by
a Law of Apr. 8, 1898, the French abandoned such rule as
impractical, and adopted that of our old Civil Code (1889) Art.
370, granting the abandoned bed to the old riparian owners.
We have reversed the process.” (J.B.L. Reyes and R. Puno, An
Outline of Phil. Civil Law, Vol. II, p. 54).].
(6) Observation of Justice J.B.L. Reyes
According to the learned Justice, Art. 461 is “unworkable
if the old bed left dry does not adjoin the lands of the new
owner, unworkable because distance may make its economic
development difficult.” Justice Reyes offers a new solution: The
old bed should be given to the riparian owners, who will now
have the duty to indemnify the owners of the land flooded,
but never to exceed the value of either the new or the old bed,
whichever be smaller. (Justice J.B.L. Reyes, Observations on
the new Civil Code, 15 Lawyers’ Journal, p. 499).
(7) Answer of the Code Commission to the Proposed Amendment by Justice J.B.L. Reyes
The amendment may work an injustice if the riparian
owner does not have enough money for indemnification, in
which case no compensation may be had for the loss, unlike
in Art. 461 which makes the prejudiced party the owner of the
abandoned river bed. Furthermore, in most cases, the distance
would not be very long. (Memorandum of the Code Com., Feb.
17, 1951).
Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this
bed shall become of public dominion.
COMMENT:
(1) Rule if New River Bed is on Private Estate
280
CIVIL CODE OF THE PHILIPPINES
Art. 462
Even if the new bed is on private property the bed becomes
property of public dominion, just as the old bed had been of
public dominion before the abandonment.
[NOTE: The new river banks shall likewise be of public dominion. (Hilario v. City of Manila, L-19570, Apr. 27, 1967).].
(2) Phraseology in the Old Civil Code
Under the old law, the river had to be “navigable or floatable.’’ (Art. 372 of the old Civil Code). The words were eliminated because all rivers, whether navigable or not, as well as
their natural beds are of public dominion. (See Art. 502, new
Civil Code; Art. 72, Spanish Law of Waters, Aug. 3, 1866).
(3) Rule if New River Bed is Itself Abandoned
Under the old Code also, the law provided that if the new
river bed is itself abandoned because of a new change of course,
the former owner of the flooded land regained ownership. (See
Sanchez v. Pascual, 11 Phil. 395 which applied the rule). It is
interesting to observe that under the new Code, no such provision is found. In view of its elimination, what rule governs? It
is believed that the following solution would be just: apply Art.
461, that is, the owner of the land flooded by the new change
of course would own the newly abandoned bed. Upon the other
hand, if the river goes back to its old course (thus, flooding the
original bed), the owner of the land originally flooded would get
back the ownership of the land (bed) which he had lost. Thus,
it would only be in this latter case when the case of Sanchez v.
Pascual (supra) would still apply.
In the case of Salvador Crespo v. Maria Bolandos, et al.,
L-13267, July 26, 1960, the court held that when for the first
time, a flood moved the Pampanga River into the lots of the
plaintiffs, the bed thus newly covered by its water became property of public ownership. But when the next flood transferred
the river bed farther south into plaintiff’s lands, they ipso facto
recovered the bed they had first lost, even as the new bed on
their property accrued to the public domain.
[NOTE: The abandoned river bed is given to the owner(s)
of the land(s) onto which the river changed its course instead
281
Arts. 463-464
CIVIL CODE OF THE PHILIPPINES
of the riparian owner(s). (Celestial v. Cachopero, 413 SCRA 469
{2003}).].
Art. 463. Whenever the current of a river divides itself
into branches, leaving a piece of land or part thereof isolated,
the owner of the land retains his ownership. He also retains
it if a portion of land is separated from the estate by the
current.
COMMENT:
(1) Rule if River Divides Itself into Branches
Example: A’s estate adjoins a river, but the river divides
itself into branches, thus affecting A’s property. A however
remains the owner of the portion (this time — an island)
which:
(a)
may be isolated from the rest (here, the portion has
not physically moved, but there is ISOLATION).
(b)
or may be separated from the rest (here, the portion has physically moved — hence, the SEPARATION).
[NOTE: The Article refers to the “formation of island by
the branching off of a river” as distinguished from the “formation of islands by successive accumulation of alluvial deposits
(unidentifiable sediment)” referred to in Arts. 464 and 465.
In the first, no accession takes place, the owner retaining his
ownership of the segregated portion; in the second, accession
takes place. (See 3 Manresa 268).].
(2) Rule is Applicable Whether River is Navigable or Not
Art. 463 applies whether the river is navigable or not, for
in both cases, the owner should not be deprived of his dominion
over the segregated or isolated property. (3 Manresa, pp. 267268).
Art. 464. Islands which may be formed on the seas within
the jurisdiction of the Philippines, on lakes, and on navigable
or floatable rivers belong to the State.
282
CIVIL CODE OF THE PHILIPPINES
Art. 465
COMMENT:
Islands Formed on the Seas, Lakes, and Navigable
Rivers
See Comments under Art. 465.
Art. 465. Islands which through successive accumulation of alluvial deposits are formed in non-navigable and
non-floatable rivers, belong to the owners of the margins
or banks nearest to each of them, or to the owners of both
margins if the island is in the middle of the river, in which
case it shall be divided longitudinally in halves. If a single
island thus formed be more distant from one margin than
from the other, the owner of the nearer margin shall be the
sole owner thereof.
COMMENT:
(1) Ownership of Islands
Who owns island formed by unidentifiable accumulated
deposits?
ANS.: It depends.
(a)
If formed on the sea —
1)
Within the territorial waters or maritime zone or
jurisdiction of the Philippines — STATE. (Art. 464).
(This is patrimonial property — Manresa).
2)
Outside of our territorial jurisdiction — The FIRST
COUNTRY TO EFFECTIVELY OCCUPY the SAME.
(This is in accordance with the principles of Public
International Law for “discovery and occupation considered as a definite mode of acquiring territory.’’)
(b)
If formed on lakes, or navigable or floatable rivers — the
State. (This is also patrimonial property — Manresa).
(c)
If formed on non-navigable or non-floatable rivers —
1)
If NEARER in margin to one bank, owner of nearer
margin is SOLE owner. (Art. 465).
283
Art. 465
CIVIL CODE OF THE PHILIPPINES
2)
If EQUIDISTANT, the island shall be divided longitudinally in halves, each bank getting half. (Art.
465).
(2) Definitions
(a)
Navigable or floatable river — if useful for floatage and
commerce, whether the tides affect the water or not (45
C.J. 403-404); should benefit trade and commerce. (U.S.
v. Oregon, 295 U.S. 1).
(b)
Non-Navigable — opposite of (a).
(3) Duty of State to Define Navigable and Non-Navigable
Rivers
State has duty to declare which rivers are navigable and
which are not. (Spanish Law of Waters, Art. 175).
(4) Reason for Preference to Nearer Margin
The nearer margin has better chances of developing the
island in the interest of agriculture. (3 Manresa 263).
(5) Rule to Follow if a New Island is Formed Between the
Older Island and the Bank
In this case, the owner of the older island is considered
a riparian owner, and if the new island is nearer in margin to
the older island, the owner of the older island should be considered also the owner of the new island. (See Manresa 262-263,
265).
Section 3. — RIGHT OF ACCESSION WITH
RESPECT TO MOVABLE PROPERTY
INTRODUCTORY COMMENT:
There are usually three types of accession with respect to
movable property:
(a)
adjunction
284
CIVIL CODE OF THE PHILIPPINES
Art. 466
(b)
mixture (commixtion or confusion)
(c)
specification
Art. 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a way
that they form a single object, the owner of the principal
thing acquires the accessory, indemnifying the former owner
thereof for its value.
COMMENT:
(1) ‘Adjunction’ Defined
It is the process by virture of which two movable things
belonging to different owners are united in such a way that
they form a single object.
Example: A varnishes his chair with the varnish of B.
(2) Good and Bad Faith
Adjunction may be done:
(a)
in good faith;
(b)
or in bad faith.
(3) Another Name for Adjunction
Another name for adjunction is conjunction. (See 3 Manresa 275).
(4) Different Kinds of Adjunction
(a)
inclusion (example: sapphire set on a ring).
(b)
soldering (example: joining legs made of lead to a body
also made of lead).
[NOTE:
1)
ferruminatio — objects are of the same metal
2)
plumbatura — objects are of different metals
285
Arts. 467-468
(c)
escritura (or writing)
(d)
pintura (or painting)
(e)
weaving
CIVIL CODE OF THE PHILIPPINES
(5) Problem
A in good faith uses the varnish of B in varnishing his
(A’s) table. What are their rights?
ANS.: A will become the owner of the varnish (in fact, of
the whole varnished table) but he must indemnify B for the
value of the varnish.
[NOTE: A is considered in good faith if he reasonably
believed that the varnish was his when as a matter of fact,
it was not. The law says: “He is deemed a possessor in good
faith who is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it x x x. Mistake upon
a doubtful or difficult question of law may be the basis of good
faith.” (Art. 526, 1st and 3rd paragraphs).].
Art. 467. The principal thing, as between two things
incorporated, is deemed to be that to which the other has
been united as an ornament, or for its use or perfection.
COMMENT:
‘Principal’ and ‘Accessory’ Defined
See Comments under Art. 468.
Art. 468. If it cannot be determined by the rule given in
the preceding article which of the two things incorporated is
the principal one, the thing of the greater value shall be so
considered, and as between two things of equal value, that
of the greater volume.
In painting and sculpture, writings, printed matter,
engraving and lithographs, the board, metal, stone, canvas,
paper or parchment shall be deemed the accessory thing.
286
CIVIL CODE OF THE PHILIPPINES
Art. 468
COMMENT:
(1) Test to Determine Which Is the Principal and Which Is
the Accessory
The principal is (in the order of preference):
(a)
that to which the other has been united as an ornament,
or for its use, or perfection (Art. 467);
[NOTE: The accessory is that which has been united
as an ornament, etc. (This is the test of INTENTION).].
(b)
that of greater value (Art. 468);
(c)
that of greater volume (Art. 468);
(d)
finally that which has greater merits (from the combined
consideration of utility and volume). (See 3 Manresa 285286).
[NOTE: With reference to a motor vehicle, the engine
may be considered as the principal, all the other parts of
the vehicle being regarded as mere accessories. (See A.C.
Ransom v. Puzon and Lazo, CA, 49 O.G. 2, 598).].
(2) Special Rule
“In painting and sculpture, writings, printed matter,
engraving and lithographs, the board, metal, stone, canvas,
paper or parchment shall be deemed the accessory thing.’’ (Art.
468). This is because what has been written, printed, etc. is
considered of greater importance.
[NOTE: Since the special rule specifies the special cases,
analogous cases which are not enumerated should not be solved
analogously, but in accordance with the general tests provided
for in Arts. 467 and 468, first paragraph. “When certain things
are enumerated, those not included are deemed excluded.” (See
3 Manresa 286).].
(3) Rule to Follow if the Adjunction Concerns Three or More
Things
In this case, determine which is really the principal. All
the rest should be considered accessories. If there be two prin287
Art. 469
CIVIL CODE OF THE PHILIPPINES
cipals, still it should be determined which, as between them,
should be considered the principal, and which is the accessory.
(3 Manresa 279).
Art. 469. Whenever the things united can be separated
without injury, their respective owners may demand their
separation.
Nevertheless, in case the thing united for the use, embellishment or perfection of the other, is much more precious
than the principal thing, the owner of the former may demand its separation, even though the thing to which it has
been incorporated may suffer some injury.
COMMENT:
(1) Rule when there can be Separation Without Injury
Here, there is no real accession. (3 Manresa 288). Hence,
we have the rule indicated in the first paragraph.
[NOTE: It is understood that the first paragraph can
apply only to soldering and inclusion because in all the rest,
separation would result in substantial injury. (Ibid.).].
(2) Rule if Accessory is More Precious than the Principal
In the second paragraph of the article, separation, although with injury (but not destruction) is allowed, if the thing
united for the use, embellishment, or perfection of the other is
much more precious than the principal.
Example: When a valuable diamond (the accessory — because it is for embellishment of the ring) is set in good faith on
a silver ring, the owner of the diamond can ask for separation,
even though there will be injury to the ring. Expenses for the
separation must of course be borne by the person who caused
the union, considering that both parties are in good faith. (See
3 Manresa 289).
288
CIVIL CODE OF THE PHILIPPINES
Art. 470
Art. 470. Whenever the owner of the accessory thing has
made the incorporation in bad faith, he shall lose the thing
incorporated and shall have the obligation to indemnify the
owner of the principal thing for the damages he may have
suffered.
If the one who has acted in bad faith is the owner of
the principal thing, the owner of the accessory thing shall
have a right to choose between the former paying him its
value or that the thing belonging to him be separated, even
though, for this purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be
indemnity for damages.
If either one of the owners has made the incorporation
with the knowledge and without the objection of the other,
their respective rights shall be determined as though both
acted in good faith.
COMMENT:
(1) Rules in Case of Bad Faith in the Adjunction
(a)
Example of the First Paragraph (Owner of Accessory Is
in Bad Faith).
If I, in bad faith, will use my varnish on the chair
of my brother, I loses all rights to the varnish. Moreover,
I will be responsible for damages.
(b)
Example of the Second Paragraph (Owner of the Principal
is in Bad Faith).
If I, in bad faith, will use my brother’s lead in soldering my pipes, my brother has the right to ask for payment
of the lead plus damages; or, he may choose to have the
lead removed from the pipes even if the pipes be destroyed,
plus damages.
(2) Effect of Bad Faith on the Part of Both
Both should be considered in good faith. (Art. 470, 3rd
par.).
289
Arts. 471-473
CIVIL CODE OF THE PHILIPPINES
Art. 471. Whenever the owner of the material employed
without his consent has a right to an indemnity, he may
demand that this consist in the delivery of a thing equal in
kind and value, and in all other respects, to that employed,
or else in the price thereof, according to expert appraisal.
COMMENT:
(1) Indemnity — How Paid
Either by (a) delivery of a thing equal in kind and value
(quantity, quality); (b) or payment of price as appraised by
experts.
(Here, sentimental value must be considered). (Art.
475).
(2) Rule Applicable Only if Consent of Owner Had Not Been
Obtained
The right to indemnity applies only if material was employed without the owner’s consent. The material may have
been the principal or the accessory.
Art. 472. If by the will of their owners two things of the
same or different kinds are mixed, or if the mixture occurs
by chance, and in the latter case the things are not separable
without injury, each owner shall acquire a right proportional
to the part belonging to him, bearing in mind the value of
the things mixed or confused.
COMMENT:
Rules in Case of Mixture
See Comments under Art. 473.
Art. 473. If by the will of only one owner, but in good
faith, two things of the same or different kinds are mixed or
confused, the rights of the owners shall be determined by the
provisions of the preceding article.
If the one who caused the mixture or confusion acted
in bad faith, he shall lose the thing belonging to him thus
290
CIVIL CODE OF THE PHILIPPINES
Art. 473
mixed or confused, besides being obliged to pay indemnity
for the damages caused to the owner of the other thing with
which his own was mixed.
COMMENT:
(1) Articles Governing Mixture
Arts. 472 and 473 deal with MIXTURE, which is the combination or union of materials where the respective identities of the
component elements are lost. [As distinguished from adjunction,
there is in mixture greater inter-penetration or decomposition of
the objects that have been mixed. (3 Manresa 277).].
(2) Two Kinds of Mixture
(a)
COMMIXTION (if solids are mixed).
(b)
CONFUSION (if liquids are mixed). (3 Manresa 277).
(3) Rules for Mixture
(a)
If the mixture is caused by one owner in good faith, or by
the will of both owners, or by chance (accident), or by a
common agent, then CO-OWNERSHIP results, each owner
acquiring an interest or right proportional to the value of
his material. (Example: If A’s palay was by chance mixed
with B’s rice, A and B are now co-owners of the mixture
in proportion to the value of their respective materials.
[Santos v. Bernabe, 54 Phil. 19]).
(b)
If the mixture is made by one owner in BAD FAITH,
then —
1)
he loses his material (in favor of the other);
2)
and is liable for damages.
(This is to penalize his bad faith.)
(Example: If a thief steals some cattle belonging to another, mixes them with his own, but can
no longer identify which is his or the others and
does not remember how many were stolen, the thief
should lose all the cattle he originally had, because
291
Art. 474
CIVIL CODE OF THE PHILIPPINES
this is a case of commixtion in bad faith and everything must therefore belong to the offended party.
[Siari Valley Estate, Inc. v. Lucasan, L-7046, Aug.
31, 1955].).
(4) Mutual Bad Faith
Both must be considered in good faith. (Manresa 300).
(5) When Mixture Is Made by Common Consent
It is understood that in this case, the stipulations of the
parties should be controlling. (3 Manresa 299).
(6) Rule if Parts Mixed Are of Same Kind, Quantity, and
Quality
When the things mixed or confused are of exactly the
same kind, quantity, and quality, all that is needed would be
to divide the mixture into two equal parts.
(7) Rule in Case Mixture Was Caused by the Negligence of
One of the Parties
The party negligent is liable for his culpa aquiliana and
should indemnify for damages. (Art. 2176). Note that good faith
does not necessarily exclude negligence. (Art. 456).
Art. 474. One who in good faith employs the material of
another in whole or in part in order to make a thing of a different kind, shall appropriate the thing thus transformed as his
own, indemnifying the owner of the material for its value.
If the material is more precious than the transformed
thing or is of more value, its owner may, at his option, appropriate the new thing to himself, after first paying indemnity for the value of the work, or demand indemnity for the
material.
If in the making of the thing bad faith intervened, the
owner of the material shall have the right to appropriate
the work to himself without paying anything to the maker,
or to demand of the latter that he indemnify him for the
292
CIVIL CODE OF THE PHILIPPINES
Art. 474
value of the material and the damages he may have suffered.
However, the owner of the material cannot appropriate the
work in case the value of the latter, for artistic or scientific
reasons, is considerably more than that of the material.
COMMENT:
(1) Specification
This article deals with SPECIFICATION. In general,
the rule of “accessory follows the principal” applies here, with
LABOR being considered the principal.
(2) Rules to Follow in Specification
(a)
If the WORKER (principal) is in good faith —
1)
he appropriates the new thing;
2)
but he must indemnify for the materials.
(Examples: If I bake a cake, using the flour of
my brother, and I am in good faith, I can get the
cake but I must pay for the flour).
EXCEPTION: If the materials (accessory) is more
precious than the new thing or is more valuable, the owner
of the material has an option —
(b)
1)
to get the new thing but he pays for the work;
2)
or to demand indemnity for the material.
If the WORKER is in BAD FAITH, the owner of the
material has an option; thus, he —
1)
can appropriate the work without paying for the
labor;
2)
or he can demand indemnity for the material plus
damages.
EXCEPTION: The option of appropriation is not
available if the value of the resultant work is more
valuable for artistic or scientific reasons.
293
Art. 474
CIVIL CODE OF THE PHILIPPINES
(3) ‘Specification’ Defined
Specification (specificatio) is the giving of a new form to
another’s material thru the application of labor. (See 3 Sanchez
Roman 100). The material undergoes a transformation or
change of identity. (See 3 Manresa 303).
Examples:
(a) baking a cake with the flour of another.
(b) using the paint of another to make a painting on your
own canvas. (See 3 Manresa 303).
[NOTE: If you use your own paint on the canvas of
another, this is adjunction. Reason: the canvas is considered the accessory, in Article 468 on adjunction.].
(c) using clothing materials of another to make a suit.
[NOTE: In the case of Aguirre v. Pheng, L-20851, Sep.
3, 1966, the Supreme Court considered the reconditioning of
a tank (in good faith) as a case of SPECIFICATION, with
the entity making the reconditioning entitled to indemnity
for its work or labor. It should be observed, however, that
under Art. 474, it is generally the worker, not the owner
of the material who is entitled to appropriate the finished
product. It is only when the material is more precious (or
of more value) than the transformed thing that the owner
of the material is given the preference or choice.].
(4) ‘Specification’ Distinguished from ‘Mixture’ and ‘Adjunction’
ADJUNCTION
MIXTURE
SPECIFICATION
1.
involves at least
two things
1.
involves at least two 1.
things
may involve only
one thing (may be
more) but form is
changed
2.
as a rule, accessory follows
principal
2.
as a rule, co-owner- 2.
ship results
as a rule, accessory follows principal
3.
the things joined
retain their nature
3.
the things mixed or 3.
confused may either
retain or lose their
respective natures
the new object retains or preserves
the nature of the
original object
294
CIVIL CODE OF THE PHILIPPINES
Art. 475
Art. 475. In the preceding articles, sentimental value
shall be duly appreciated.
COMMENT:
Consideration of the Sentimental Value
It is often that a thing for some sentimental reasons (as a gift
on account of graduation) may be worth (to its owner) much more
than its actual value.
295
CIVIL CODE OF THE PHILIPPINES
Art. 473
Chapter 3
QUIETING OF TITLE (N)
(All provisions in this Chapter are new.)
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial
to said title, an action may be brought to remove such cloud
or to quiet the title.
An action may also be brought to prevent a cloud from
being cast upon title to real property or any interest therein.
COMMENT:
(1) Statement of the Code Commission Explaining the Reason for the Chapter on Quieting of Title
“(a) Section 377 of the Code of Civil Procedure provides that
actions to remove a cloud from the title to real estate shall
be brought in the province where the land is situated.
“(b) But no provision of the substantive law states under what
conditions the action may be brought.
“(c) This is a well-established remedy in American Law. The
reason is that equity comes to the aid of him who would
suffer if the instrument (as described in Art. 476) were
enforced. He is in good conscience entitled to a removal
of the cloud or doubt upon his title. Upon the other hand,
the respondent has no legal or moral ground to hold the
instrument against the petitioner’s title.’’ (Report of the
Code Commission, p. 55).
296
CIVIL CODE OF THE PHILIPPINES
Art. 476
Severino Baricuatro, Jr. v. CA, et al.
GR 105902, Feb. 9, 2000
120 SCAD 643
Quieting of title is a common-law remedy for the
removal of any cloud upon or doubt or uncertainty with
respect to title to real property. (Vda. de Aviles v. CA, 76
SCAD 396 [1966]).
Originating in equity jurisprudence, its purpose is
to secure “an adjudication that a claim of title to or an
interest in property, adverse to that of the complainant,
is invalid, so that the complainant and those claiming
under him may be forever afterward free from any danger
of hostile claim.’’ (Arturo Tolentino, Commentaries and
Jurisprudence on the Civil Code of the Philippines, Vol.
2, p. 137).
In an action for quieting of title, the competent court
is tasked to determine the respective rights of the complainant and other claimants, “not only to place things in
their proper place, to make the one who has no rights to
said immovable respect and not disturb the other, but also
for the benefit of both, so that he who has the right would
see every cloud of doubt over the property dissipated,
and he could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the
property as he deems best.’’ (Edgardo Paras, Civil Code
of the Philippines Annotated, 13th ed. [1994], p. 270).
(2) Kinds of Action Referred To
(a)
Remedial — (action to remove the cloud or to quiet title).
(Art. 476, par. 1).
(b)
Preventive — (action to prevent a future cloud or doubt
— actio quia timet).
(3) Existence of the ‘Cloud’
The “cloud’’ (or doubt) on title exists because:
(a)
of an instrument (deed, or contract) or record or claim
or encumbrance or proceeding.
297
Art. 476
CIVIL CODE OF THE PHILIPPINES
(b)
which is APPARENTLY valid or effective.
(c)
BUT is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, or extinguished (or terminated) or barred by extinctive prescription. (Arts.
476-478).
(d)
AND may be prejudicial to the title. (Art. 476).
Example:
An agent, whose authority was not in writing, sold
land belonging to his principal to another person, in
representation of said principal. The deed of sale was a
public instrument. Under Art. 1874, a sale by an agent of
land is not valid if the authority is not in writing. If the
buyer insists on claiming the property as his own, may
the principal bring an action to quiet title?
ANS.: Yes. On the face of the deed of sale, nothing
appears to be wrong. It is therefore apparently valid,
although in reality, it is null and void because of Art.
1874.
[NOTE: Had the deed of sale provided that the
authority given the agent was not in writing, it is clear
on the FACE of the contract that it is invalid (when the
law is considered). Hence, there being no “cloud,” it is not
proper to bring the action.].
Example:
O’s land was sold by F (a forger) to B (a buyer in
good faith). O’s name had been forged by F on the deed
of sale. The sale, on its face, is apparently valid, with O’s
name indicated as the seller. In truth, however, the sale
is defective because of the forgery. O’s remedy is an action
to quiet title.
[NOTE: Please observe that when the instrument is
not valid on its face, the remedy does not apply. In one
case, it was held that the test is this: if a person were
sued for ejectment on the strength of the contract, does
he have to produce evidence in order to defeat the action?
If no evidence other than the contract is needed, it is because the contract is invalid on its face. If evidence is still
298
CIVIL CODE OF THE PHILIPPINES
Art. 476
required, it is because the contract is apparently valid.
(See Pixley v. Huggins, 15 Cal. 127). Stated otherwise, the
test is: would the owner of the property in an action at
law brought by the adverse party, and founded upon the
instrument or claim, be required to offer evidence to defeat
a recovery? If proof would be essential, the cloud exists;
if proof is not needed, no cloud is cast. (See Thompson v.
Pac, 219 Fed. 624).].
National Grains Authority v. IAC
GR 68741, Jan. 28, 1988
The real purpose of the Torrens System is to quiet
title to land and to stop forever any question as to its
legality. Once a title is registered, the owner may rest
secure, without the necessity of waiting in the portals of
the court, or sitting on the mirador su casa, to avoid the
possibility of losing his land. An indirect or collateral attack on a Torrens Title is not allowed.
The only exception to this rule is where a person
obtains a certificate of title to a land belonging to another
and he has full knowledge of the rights of the true owner.
He is then considered as guilty of fraud and he may be
compelled to transfer the land to the defrauded owner so
long as the property has not passed to the hands of an
innocent purchaser for value.
Heirs of Uberas v. CFI of Negros Occidental
L-48268, Oct. 30, 1978
The ruling in Foja v. Court of Appeals (75 SCRA
441 [1977]), that an action to quiet title to property in
the possession of the plaintiff is imprescriptible is hereby
reiterated.
(4) Rights of a Property Owner to Have Clouds Eliminated
When one is disturbed in any form in his rights of property
over an immovable by the unfounded claim of others, he has
the right to ask from the competent courts:
299
Art. 476
CIVIL CODE OF THE PHILIPPINES
(a)
that their respective rights be determined,
(b)
not only to place things in their proper place, to make
the one who has no rights to said immovable respect
and not disturb the other,
(c)
but also for the benefit of both,
(d)
so that he who has the right would see every cloud
of doubt over the property dissipated,
(e)
and he could afterwards without fear introduce the
improvements he may desire, to use, and even to
abuse the property as he deems best. (Bautista v.
Exconde, 40 O.G. [8th S., No. 12, p. 231]).
(5) Reasons for Allowing the Action
(a)
the prevention of litigation (eventual litigation);
(b)
the protection of the true title and possession;
(c)
the promotion of right and justice. (Lebman v. Shook, 69
Ala. 486).
(6) Nature of the Action
The result is not binding upon the whole world, therefore,
not in rem. It is really “in personam’’ because it is enforceable
only against the defeated party, or privies. (See Sabina Santiago, et al. v. J.M. Tuason and Co., Inc., L-14223, Nov. 23,
1960, where the Court said that a suit to quiet title brought
against one co-owner, is NOT res judicata with respect to the
other co-owners who were not made parties thereto). In fact,
an action for conveyance, which is really in personam, has, in
at least one case, been considered by our Supreme Court, as
an action to quiet title. (Sapto, et al. v. Fabiana, 103 Phil. 683).
Technically, it is quasi in rem, which is an action in personam
concerning real property.
(7) Query
Are personal (movable) properties referred to in the action
to quiet title?
300
CIVIL CODE OF THE PHILIPPINES
Art. 476
ANS.: As the law is worded, NO, because the law says
“real property or any interest therein.” But by analogy, the
same principles should apply to personal property, particularly
vessels, which although movable, partake of the nature of real
property.
(8) Some Decided Doctrines Where It was Held that There
Existed a Cloud Over the Title
(a)
An agent, with the written authority of his principal to
sell the latter’s property, sold the same AFTER the death
of the principal but antedated the contract of sale. (Saltmarsh v. Smith, 32 Ala. 404).
(b)
If the contract is forged. (Briggs v. Industrial Bank, 197
N.C. 120).
(c)
A contract by an incapacitated person. (Alvey v. Reed, 115
Ind. 148).
(d)
A mortgage valid on its face and will cause prejudice
although in reality invalid. (Vasket v. Moss, 115 N.C.
448).
(9) Requisite Needed to Bring an Action to Prevent a Cloud
(Action or Bill QUIA TIMET).
To authorize an action to prevent a cloud being cast on
title, it must be made clear that there is a fixed determination
on the part of the defendant to create a cloud (Clark v. Davenport, 95 N.Y. 477), and it is not sufficient that the danger is
merely speculative. (Sanders v. Yonkers, 63 N.Y. 489).
Example: If the sheriff threatens to attach property which
is exempted from attachment, an action to prevent a cloud on
title will prosper. (Webb v. Hayner, 49 Fed. 605).
(10) Does the Action to Quiet Title Prescribe?
It depends:
(a)
If the plaintiff is in possession of the property, the action
DOES NOT PRESCRIBE. (See Foja v. Court of Appeals,
301
Art. 476
CIVIL CODE OF THE PHILIPPINES
75 SCRA 441, reiterated in Heirs of Uberas v. CFI of Negros Occidental, L-48268, Oct. 30, 1978, 86 SCRA 145).
Reason: While the owner continues to be liable to
an action, proceeding, or suit upon the adverse claim,
he has a continuing right to be given aid by the court to
ascertain and determine the nature of such claim and its
effect on his title, or to assert any superior equity in his
favor. He may wait until his possession is disturbed or
his title is attacked before taking steps to vindicate his
right. (44 Am. Jur. 47; Cooper v. Rhea, 39 L.R.A. 930;
Sapto, et al. v. Fabiana, 103 Phil. 683). Thus, a buyer of
land in 1931, who possesses it from that date may still
compel the seller’s successors-in-interest to execute the
proper deed of conveyance in 1954, so that the deed may
be registered. (Sapto, et al. v. Fabiana, 103 Phil. 683).
(b)
If the plaintiff is NOT in possession of the property, the
action MAY PRESCRIBE. (Sapto, et al. v. Fabiana, 103
Phil. 683). Moreover, even if the action is brought within
the period of limitations, it may be barred by LACHES,
where there is no excuse offered for the failure to assert
the title sooner. (Ongsiako, et al. v. Ongsiako, et al., L7510, Mar. 30, 1957; 44 Am. Jur. 47, 50). If somebody else
has possession, the period of prescription for the recovery
of the land is either 10 or 30 years, depending on ordinary
or extraordinary prescription. (See Ford v. Clendenmin,
215 N.Y. 10). And even if brought within the prescriptive
period, the action may no longer prosper if there has been
an unreasonable or unjustified delay in filing the suit
— estoppel by laches. (See 44 Am. Jur. 51).
NOTE: As a general rule, it is settled that an action
to quiet title does not prescribe. (Berico v. CA, 44 SCAD
84 [1993]).
(11) Cases
Gallar v. Hussain
L-20954, May 24, 1967
FACTS: Hussain sold a retro in a private instrument, a
parcel of land protected by a Torrens Title to Chichirita, but
302
CIVIL CODE OF THE PHILIPPINES
Art. 476
the right to repurchase was never exercised. The buyer sold the
land to another who in turn sold and delivered the property in
1919 to Gallar. These subsequent sales were in private instruments. Gallar who had been in possession since 1919, sued in
1960 (or 41 years later) the heirs of Hussain to compel them
to execute a formal deed of conveyance so that Gallar could
obtain a transfer certificate of title. The heirs interposed the
defense of prescription.
ISSUES:
(a) Is Gallar’s suit one for specific performance or one
for the quieting of title?
(b)
Has the action prescribed?
(c) If the heirs of Hussain had been the possessors of the
property (instead of Gallar), would the answer be the same?
HELD:
(a) Gallar’s suit should be considered an action to quiet
title because Gallar was the owner and the sale had been consummated, despite the fact that the transactions had all been
merely in private instruments.
(b) Gallar’s suit had not prescribed. In an action to
quiet
title, if the plaintiff is in possession, the suit does
not prescribe. (See also Sapto v. Fabiana, 103 Phil. 683).
(c) If the heirs of Hussain had been in possession, Gallar’s suit would have prescribed for then the action would not
be one to quiet title, but one to recover real property. The latter must of course be brought within the proper legal period
(depending on ordinary or extraordinary prescription).
Simeon A. Lee, et al. v.
Court of Appeals, et al.
L-37135, Dec. 28, 1973
ISSUE: Just because probate proceedings are instituted, is it proper to archive an action to quiet title
(between parties each of whom claims to have purchased
the same properties from an heir) to certain properties
involved in said probate proceedings?
303
Art. 477
CIVIL CODE OF THE PHILIPPINES
HELD: No, it would not be proper to do the archiving
simply because probate proceedings are begun in court.
After all, probate proceedings do not delve into the ownership of the properties involved. Indeed, probate courts
have no jurisdiction to determine with finality, conflicts of
ownership. Such conflicts must be litigated in a separate
action, except where a party merely prays for the inclusion or exclusion from the inventory of any particular
property, in which case the probate court may pass upon
provisionally the question of inclusion or exclusion, but
without prejudice to its final determination in an appropriate action.
Vda. de Cabrera v. CA
78 SCAD 705
(1997)
An action for reconveyance of a parcel of land based
on implied or constructive trust prescribes in 10 years,
the point of reference being the date of registration of the
deed or the date of the issuance of the certificate of title
over the property.
But this rule applies only when the plaintiff or the
person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is
an actual possession of the property, as the defendants
are in the instant case, the right to seek reconveyance,
which, in effect, seeks to quiet title to the property, does
not prescribe.
Art. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject
matter of the action. He need not be in possession of said
property.
COMMENT:
(1) Necessity for Title of the Plaintiff
The plaintiff must either have the legal (registered) own304
CIVIL CODE OF THE PHILIPPINES
Art. 477
ership or the equitable (beneficial) ownership. Otherwise, the
action will not prosper.
[NOTE: In Nieto v. Quines, et al., L-14643, Jan. 28, 1961,
the Supreme Court had occasion to rule that one who has complied with all the terms and conditions which would entitle him
to a homestead patent, even without a right on the land is to
be regarded as the equitable owner thereof. (Balboa v. Farrales,
51 Phil. 498).].
(2) Non-necessity of Possession
The plaintiff may be in possession or not in possession.
The differences in effects are tabulated below:
If Plaintiff Is
In Possession
If Plaintiff Is Out
of Possession
a)
period does not prescribe
a) period prescribes
b)
only right is to remove or
prevent cloud. (See 44 Am.
Jur. 46-47).
b) aside from being given
the right to remove or
prevent cloud, he may also
bring the ordinary actions
of ejectment, publiciana
or reivindicatoria within
the proper prescriptive
periods. (See 44 Am. Jur.,
46-47).
(3) Illustration as to Who May Be the Plaintiff
With my brother’s authority, and as a result of a trust
agreement, I registered the land of my brother in my name.
Neither of us is in actual possession. Who may bring an action
to quiet title against, for example, a stranger?
ANS.: Either my brother or me, since my brother has the
equitable title, while I have the legal title. Neither of us needs
possession before the action is brought.
305
Art. 478
CIVIL CODE OF THE PHILIPPINES
Art. 478. There may also be an action to quiet title or
remove a cloud therefrom when the contract, instrument or
other obligation has been extinguished or has terminated,
or has been barred by extinctive prescription.
COMMENT:
(1) Two Instances Where the Action May Be Used
Two cases are mentioned in this article:
(a)
when the contract, etc., has ended;
(b)
when the action is barred by extinctive prescription.
(2) Example of (a)
X was given by Y the right of ownership over a piece of land
for 5 years. At the end of that time, if X insists on his continued
ownership, Y may bring the action to quiet title. (See 78 ALR
127). In one case, a piece of land was given to a husband and his
wife on condition that if the wife later on deserts unjustifiably
the husband, the latter would be the sole owner thereof. The
wife, after a few months, deserted unjustifiably the husband,
but insisted on her co-ownership. The husband may now bring
the action because the resolutory condition has been fulfilled.
(Brooks v. Kearns, 86 Ill. 547).
(3) Examples of (b)
(a)
A possessed B’s land in bad faith adversely, publicly, and
continuously for 30 years. A is now, therefore, the owner.
If B still insists on his ownership, A may bring the action
to quiet title. In this case, B can really not recover the
land anymore from A.
(b)
A owns a piece of land mortgaged to Y. If later the mortgage is extinguished because of the statute of limitations,
A may bring the action to quiet title or remove the cloud
for it is evident that the mortgage no longer exists. (See
Bank v. Steward, 8 Kan. A. 22).
306
CIVIL CODE OF THE PHILIPPINES
Arts. 479-480
Art. 479. The plaintiff must return to the defendant all
benefits he may have received from the latter, or reimburse
him for expenses that may have redounded to the plaintiff’s
benefit.
COMMENT:
(1) Duty of Plaintiff to Make Certain Reimbursement
Example:
A bought land thru an agent whose authority was not in
writing. A then built a fence around the land. In an action to
quiet title, the principal will win (since under Art. 1874, the
sale is really void) but he must reimburse A for the expenses
for the fence, since this has redounded to his (the principal’s)
benefit.
[NOTE: Moreover, in the above case for instance, any
expenses made by A for the execution or registration of the
contract (in case he paid such expenses) must be reimbursed.
(See Taylor v. Rawlins, 86 Fla. 279).].
(2) General Rule Based on Equity
In general, it may be said that whenever the plaintiff is
shown to be legally or morally bound to restore or reimburse,
he must do so. (See 44 Am. Jur. 53; see also Nellis v. Minton,
91 Okla. 75). This is because “he who comes to equity must do
equity” and because the precise purpose of the action is merely
to quiet title and not to obtain some pecuniary benefits.
Art. 480. The principles of the general law on the quieting of title are hereby adopted insofar as they are not in
conflict with this Code.
COMMENT:
(1) Conflict Between the Civil Code and the Principle of the
General Law on the Subject
In case of conflict between the Civil Code and the princi307
Art. 480
CIVIL CODE OF THE PHILIPPINES
ples of the general law on the quieting of title, the former shall
prevail.
(2) Principles of General Law
What is meant by “principles of general law” (on the subject)?
ANS.: These are the general principles developed on the
subject in Anglo-American jurisprudence, where this remedy is
well-known. (Memorandum of the Code Com., Feb. 17, 1951).
(3)
Some of the Principles
(a)
(b)
Regarding Defenses: The defendant can win if he can
prove:
1)
that the plaintiff does not have legal or equitable
title. (51 C.J. 197). (This is because under Art. 477,
title is required.)
2)
that the defendant has acquired the ownership by,
for example, adverse possession. (44 Am. Jur. 46).
3)
that the case has already been previously decided
between the parties on the same issue — res judicata. (44 Am. Jur. 46).
4)
that the defendant became the owner after the action
had been filed, but before he filed his answer (as by
succession, donation, etc.). (See 44 Am. Jur. 45-46).
5)
that the action has prescribed, the plaintiff being
outside of possession. (44 Am. Jur. 46-47).
Regarding the Reliefs Given:
1)
Unauthorized mortgages may be cancelled. (Brown
v. Brown, 97 Ga. 531).
2)
In an ordinary case, the defendant may in his counter-claim ask for quieting of title as against the
plaintiff. (This can be done if the court has jurisdiction, in order to settle all conflicting claims.) (See 44
Am. Jur. 57; see also Flourney v. Lastrapes, 25 L. ed.
406).
308
CIVIL CODE OF THE PHILIPPINES
3)
Art. 481
Injunction may be availed of such as a prohibition
to destroy certain properties or to gather fruits from
the land in question. (See 44 Am. Jur. 57).
Art. 481. The procedure for the quieting of title or the
removal of a cloud therefrom shall be governed by such rules
of court as the Supreme Court shall promulgate.
COMMENT:
(1) Rules of Procedure To Be Framed By Supreme Court
The Article explains itself.
(2) Some Rules of Procedure (Pertinent to the Subject) as
Enunciated by American Courts
(a)
The venue of the action is determined by the situation or
location of the premises, and not by the residence of the
party. (Nugent v. Parsel, 63 Miss. 99).
(b)
The process or notice should accurately describe the property and state in general terms the nature and extent of
the plaintiff’s claim. (Richards v. Moran, 137 Iowa 220).
(c)
The suit cannot be brought in the name of one party for
the use and benefit of another (Peck v. Sims, 120 Ind. 345);
is not only may (New Orleans Nat. Bank v. Raymond, 29
La. Ann. 355) but must be prosecuted in the name of the
real party in interest. (Peck v. Sims, 120 Ind. 345).
(d)
In a suit for the quieting of title, the actual possessor
at the time of the filing of the action must be respected
in his possession until after there is an adjudication on
the merits. If said actual possessor is disturbed in the
meantime by the other party, the former is entitled to
a writ of preliminary injunction against said disturbers.
(Catalino Balbino, et al. v. Hon. Wenceslao M. Ortega, et
al., L-14231, Apr. 28, 1962).
309
Art. 481
CIVIL CODE OF THE PHILIPPINES
(3) Problem
A died intestate, leaving no debts and no administrator of
the estate. During his lifetime, A executed an invalid mortgage
with B. May the heirs of A bring an action to cancel the deed
of mortgage because it is void and is a cloud on their title?
ANS.: Yes. Where one dies in the manner set forth above,
all the heirs of the decedent may jointly maintain an action
to cancel a deed of their ancestor, upon the ground that it is
illegal and void, and is a cloud upon their title.
(4) When the Action to Quiet Title Will Not Prosper
(a)
if it is merely an action to settle a dispute concerning
boundaries. (78 ALR 58; Anastacia Vda. de Aviles v. CA,
76 SCAD 396, GR 95748, Nov. 21, 1996).
(b)
if the case merely involves the proper interpretation and
meaning of a contract or document. (78 ALR 21).
(c)
if the plaintiff has no title, either legal or equitable. (Art.
477).
(d)
if the action has prescribed and the plaintiff is not in
possession of the property. (Ford v. Clendennim, 215 N.Y.
10).
(e)
if the contract, instrument, etc. is void on its face. (Thompson v. Peck, 219 Fed. 624). (For instance, assume that X,
armed with a certain document, seeks to eject Y. If the
document on its face is so defective that Y does not even
have to present rebuttal evidence, the document may be
said to be void on its face. In a case like this, Y, to protect
his rights, does not have to bring an action to quiet title.
(See Pixley v. Huggins, 15 Cal. 127).
(f)
if it is a mere claim or assertion (whether oral or written)
unless such claim has been made in a court action (78
ALR 83) or the claim asserts that an instrument or entry
in behalf of the plaintiff is not really what it appears to
be. (See 78 ALR 55).
310
CIVIL CODE OF THE PHILIPPINES
Art. 481
(5) What the Court’s Task Is
Rumarate v. Hernandez
487 SCRA 317 (2006)
In an action for quieting of title, the court is tasked to
determine the respective rights of the parties so that the complaint and those claiming under him may be forever free from
any danger of hostile claim.
311
CIVIL CODE OF THE PHILIPPINES
Chapter 4
RUINOUS BUILDINGS AND TREES
IN DANGER OF FALLING
Art. 482. If a building, wall, column, or any other construction is in danger of falling, the owner shall be obliged
to demolish it or to execute the necessary work in order to
prevent it from falling.
If the proprietor does not comply with this obligation,
the administrative authorities may order the demolition of
the structure at the expense of the owner, or take measures
to insure public safety.
COMMENT:
(1) Rule in Case of Building, Etc. in Danger of Falling
Example:
On A’s estate is a wall facing the street. The wall is in
danger of falling. May the owner be compelled to demolish
or repair it? Yes, and if he does not do so, the administrative
authorities may either order its demolition at A’s expense or
take measures to insure public safety.
(2) The Complainant
The complainant who brings the case must either have his
property adjacent to the dangerous construction, or must have
to pass by necessity in the immediate vicinity. (Manresa). If
the construction falls, the owner would be liable for damages,
as a general rule. (Art. 2190).
312
CIVIL CODE OF THE PHILIPPINES
Art. 483
Art. 483. Whenever a large tree threatens to fall in such
a way as to cause damage to the land or tenement of another
or to travelers over a public or private road, the owner of
the tree shall be obliged to fell and remove it; and should
he not do so, it shall be done at his expense by order of the
administrative authorities.
COMMENT:
Rule With Respect to Large Trees About to Fall
Failure on the owner’s part to act accordingly will be met
with expenses shouldered by him.
313
CIVIL CODE OF THE PHILIPPINES
Title III. — CO-OWNERSHIP
Art. 484. There is co-ownership whenever the ownership
of an undivided thing or right belongs to different persons.
In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title.
COMMENT:
(1) ‘Co-ownership’ Defined
Co-ownership is that state where an undivided thing or
right belongs to two or more persons. (Art. 484). It is “the right
of common dominion which two or more persons have in a spiritual (or ideal) part of a thing which is not physically divided.”
(3 Sanchez Roman 162). A co-ownership is not a juridical person, nor is it granted any form of juridical personality. Thus, it
cannot sue in court. Co-owners may, of course, litigate in their
individual capacities. (See Smith v. Lopez, 5 Phil. 78).
Sanchez Roman defines “co-ownership’’ as the right of
common dominion which two or more persons have in a spiritual part of a thing, not materially or physically-divided. (See
Sanchez v. CA, 408 SCRA 540 [2003]).
Manresa defines the term as the “manifestation of the
private right of ownership, which instead of being exercised by
the owner in an exclusive manner over the things subject to it,
is exercised by two or more owners and the undivided thing or
right to which it refers to one and the same.’’ (See Ibid.).
314
CIVIL CODE OF THE PHILIPPINES
Art. 484
Cases
Salvador v. CA
60 SCAD 303
(1995)
Possession of a co-owner is like that of a trustee and shall
not be regarded as adverse to the other co-owners but in fact
as beneficial to all of them.
[NOTE: There is no co-ownership when the different portions owned by different people are already concretely determined and identifiable, even if not yet technically described.
(See De la Cruz v. Cruz, L-27759, Apr. 17, 1970).].
Nufable v. Nufable
108 SCAD 204, 309 SCRA 692
(1999)
A co-owner can only alienate his pro indiviso share in
the co-owned property. Thus, a co-owner does not lose his part
ownership of a co-owned property when his share is mortgaged
by another co-owner without the former’s knowledge and consent.
Sanchez v. Court of Appeals
404 SCRA 540
(2003)
Issue: May a co-owner validly lease his undivided interest
to a third party?
Held: Yes, independently of the other co-owners.
[NOTE: A co-owner of an undivided parcel of land is an
owner of the whole, and over the whole he exercises the right
of dominion but he is at the same time the owner of a portion
which is truly ABSTRACT. However, there is NO co-ownership
when the different people are already concretely determined
and are separately identifiable even if not yet technically described. (De Guia v. CA, 413 SCRA 114 {2003}).].
[NOTE: Any co-owner may file an action under Art. 487
not only against a third person but also against another co315
Art. 484
CIVIL CODE OF THE PHILIPPINES
owner who takes exclusive possession and asserts exclusive
ownership of the property. (De Guia v. CA, supra.).].
(2) What Governs Co-ownership?
(a)
contracts
(b)
special legal provisions
(c)
provisions of the Title on Co-ownership
In default of the 1st, apply the 2nd; in the absence of the
2nd, apply the 3rd. (Art. 484).
(3) Sources of Co-ownership (How It Arises)
(a)
By law — [party walls, party ditches; the co-ownership of
earnings by a man and a woman whose marriage is void,
or who are living together without benefit of marriage
— Art. 144, but here there must be no existing and valid
conjugal partnership, as when either is already married to
someone else (Victor Juaniza v. Eugenio Jose, L-50127-28,
Mar. 30, 1979), in a way, the conjugal partnership, though
in the last case, the rules on the conjugal partnership apply as a rule].
Mariano Adriano, et al. v. CA, et al.
GR 124118, Mar. 27, 2000
123 SCAD 634
Property acquired by a man while living with a
common-law wife during the subsistence of his marriage
is conjugal property, even when the property was titled
in the name of the common-law wife. In such a case, a
constructive trust is deemed to have been created over the
property which lawfully pertains to the conjugal partnership of the subsisting marriage.
Tumlos v. Spouses Mario Fernandez
GR 137650, Apr. 12, 2000
125 SCAD 445
If the actual contribution of a party is not proved,
there will be no co-ownership and no presumption of equal
shares.
316
CIVIL CODE OF THE PHILIPPINES
Art. 484
(b)
By contract — (two cousins buy a parcel of land, share
in the price, and agree not to divide for 10 years). (See
Gallemit v. Tabiliran, 20 Phil. 241).
(c)
By chance — (commixtion, confusion, hidden treasure).
(d)
By occupation or occupancy (as when a wild beast is
caught by several persons). (Punzalan v. Boon Liat, 44
Phil. 320). (It would seem that this ruling is erroneous,
because while it is occupation, still the co-ownership must
have been presumed because of an implied agreement or
contract between the two hunters.)
(e)
By succession or will [as in the case of intestate heirs before
partition (Javier v. Javier, 6 Phil. 493), the successional
estate being a co-ownership prior to partition]. (See Decision of the Supreme Court of Spain, June 27, 1949).
[NOTE: It has been held, however, that although
in one sense, the co-heirs are really co-owners, still in
the exercise of the right of legal redemption, the rule
concerning co-heirs (Art. 1067) must apply, and not that
concerning co-owners. If, however, after partition of the
hereditary estate, it is decided that some of the co-heirs
will continue to be co-owners of a certain portion of the
estate (for example, a house or a car), the rule for legal
redemption will now be the rule concerning co-owners.
(See Castro, et al. v. Castro, L-7464, Oct. 24, 1955).].
Del Mundo v. Court of Appeals
L-25788, Apr. 30, 1980
If a father and his daughter declare in a deed of partition that they are co-owners of a parcel of land which is
really paraphernal land of his second wife, co-ownership
is NOT necessarily created, for the lot remains paraphernal.
Republic v. Estenzo
L-35376, Sep. 11, 1980
Res judicata generally applies in cadastral proceedings, including adjudications of co-ownership therein. (De
Velayo v. Court of Appeals, 99 SCRA 110).
317
Art. 484
CIVIL CODE OF THE PHILIPPINES
Romana v. PCIB
L-56479, Nov. 15, 1982
There can be res judicata even if the doctrine or issue
involved was resolved not in the decision of the first case
but only in an incidental order issued after the promulgation of said decision (here, the doctrine was in a resolution of a motion to quash the writ of execution issued in
the case). After all, the requisites of res judicata are all
present, including the finality of the resolution adverted
to. [NOTE: In the resolution, the motion to quash was
denied.].
Cuizon v. Remoto
486 SCRA 196 (2006)
FACTS: The portion sold by Placida Tabada–Lambo
to respondents under the 1968 Deed of Sale of Real Property went beyond that legally permissible? Issue: Should
this be allowed?
HELD: No, such should pertain only to 4,000 square
meters as the sale can affect only her 1/4 share in the 16hectare co-owned property.
(4) Kinds of Co-ownership
(a)
(b)
(c)
From the viewpoint of subject matter:
1)
Co-ownership of an undivided thing
2)
Co-ownership of an undivided right (like a lease right
inherited from a deceased father). (Samaniego, et al.
v. Villajin, [CA] 43 O.G. 3137).
From the viewpoint of source:
1)
Contractual co-ownership (an agreement not to divide for ten years allowed — Art. 494).
2)
Non-contractual co-ownership (if the source is not a
contract).
From the viewpoint of the rights of the co-owners:
1)
Tenancy in common (or ownership in common or just
co-ownership as contemplated in Art. 484).
318
CIVIL CODE OF THE PHILIPPINES
2)
(5)
Art. 484
Joint tenancy (also called joint ownership).
‘Tenancy in Common’ Distinguished from ‘Joint Tenancy’
TENANCY IN COMMON
(Co-ownership)
JOINT TENANCY
1.
This involves a physical
whole. BUT there is an IDEAL (abstract) division; each
co-owner being the owner of
his own ideal share.
1. This also involves a physical whole. BUT there is no
IDEAL (abstract) division;
each and ALL of them
own the WHOLE thing.
2.
Each co-owner may dispose
of his ideal or undivided
share (without boundaries)
WITHOUT the other’s consent.
2. Each co-owner may not
dispose of his own share
without the consent of
ALL the rest, because
he really has NO IDEAL
share.
3.
If a co-owner dies, his share
goes to his own heirs.
3. If a joint-tenant dies, his
share goes by accretion to
the other joint-tenants by
virtue of their survivorship or jus accrecendi.
4.
If a co-owner is a minor, this
does not benefit the others
for the purpose of prescription, and prescription therefore runs against them.
4. If one joint-tenant is under a legal disability (like
minority), this benefits
the other against whom
prescription will not run.
(See Tagarao v. Garcia, 61 Phil. 5; Layones v. Bolivar,
[CA] 40 O.G. [4th S] No. 8, p. 198; Salmond, Jurisprudence).
(6) Characteristics of Co-ownership
(a)
There must be more than one subject or owner.
319
Art. 484
CIVIL CODE OF THE PHILIPPINES
(b)
There is one physical whole divided into IDEAL (undivided) shares.
(c)
Each IDEAL share is definite in amount, but is not physically segregated from the rest.
(d)
Regarding the physical whole, each co-owner must respect
each other in the common use, enjoyment, or preservation
of the physical whole. (See Scaevola). [Thus, a co-owner
cannot sell a definite (with boundaries) part of the property]. (See Lopez v. Illustre, 5 Phil. 568-569). The interest
of the others must indeed not be disregarded. (Art. 486).
(e)
Regarding the IDEAL share, each co-owner holds almost
absolute control over the same. [Thus, he is full owner of
his part, and of the fruits and benefits thereof; and he may
alienate, assign, or mortgage it, but he cannot substitute
another person in its enjoyment, when personal rights are
involved. (Art. 493).].
(f)
It is not a juridical person, i.e., it has no juridical personality. (Smith v. Lopez, 5 Phil. 78).
(g)
A co-owner is in a sense a trustee for the other co-owners.
(See Castrillo v. Court of Appeals, L-18046, Mar. 31, 1964).
Thus, he may not ordinarily acquire exclusive ownership
of the property held in common thru prescription. (Ibid.).
(7) ‘Co-ownership’ Distinguished from an ‘Ordinary Partnership’
CO-OWNERSHIP
CONJUGAL
PARTNERSHIP
(a)
no legal personality
(a) has legal or juridical personality
(b)
created by contract or by
other things
(b) created by contract only
(express or implied)
(c)
purpose — collective enjoyment
(c) purpose is profit
320
CIVIL CODE OF THE PHILIPPINES
(d)
Art. 484
agreement for it to exist for
10 years — valid. (If more
than 10 years, the excess is
void.)
(d) there is no term limit set
by the law
[NOTE: 20 years is the
maximum if imposed by
the testator or the donee of
the common property. (Art.
949).].
(e)
as a rule, no mutual representation
(e) as a rule, there is mutual
representation
(f)
not dissolved by death or
incapacity of co-owner
(f) is dissolved by the death
or incapacity of partner
(g)
can dispose of his share
without consent of others
(g) cannot substitute another
as partner in his place
without consent of the
others
(h)
profits must always depend
on proportionate shares.
(Art. 485).
(h) profits may be stipulated
upon
(8) ‘Co-ownership’ Distinguished from ‘Conjugal Partnership’ (BAR)
CONJUGAL
PARTNERSHIP
CO-OWNERSHIP
(a)
may arise by an ordinary
contract
(a) arises only because of the
marriage contract
(b)
sex of the co-owners is immaterial
(b) one must be a male, the
other a female
(c)
co-owners may be two or
more
(c) conjugal owners are always
only two
(d)
profits are proportional to
respective interests
(d) profits are generally 50-50
unless a contrary stipula-
321
Art. 485
CIVIL CODE OF THE PHILIPPINES
tion is in a marriage settlement
(e)
death of one does not dissolve the co-ownership
(e) death of either husband or
wife dissolves the conjugal
partnership
(f)
generally all the co-owners
administer
(f) generally, the husband is
the administrator
(g)
co-ownership is discouraged
by law
(g) encouraged by law to
provide for better family
solidarity
Art. 485. The share of the co-owners, in the benefits as
well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the contrary
shall be void.
The portions belonging to the co-owners in the coownership shall be presumed equal, unless the contrary is
proved.
COMMENT:
(1) Shares in Benefits and Charges
(a)
The share in the benefits and charges is proportional to the
interest of each. Hence, if one co-owner owns two-thirds,
he shares two-thirds of the taxes.
(b)
Contrary stipulation is VOID. To do so would be to run
against the nature of co-ownership. (Manresa).
(c)
Each co-owner shares proportionately in the accretion
or alluvium of the property. This is because an increase
in area benefits all. (Tarnate v. Tarnate, [CA] 46 O.G.
4397).
(2) Taxes
If a co-owner has paid the taxes to prevent forfeiture of
the common property for tax delinquency, he could compel
contribution from his co-owners. But if he has not yet paid, he
322
CIVIL CODE OF THE PHILIPPINES
Art. 486
cannot compel them to pay the overdue and unpaid taxes to
him himself, for after all, the taxes are due, not to him, but
to the government. (Jalandoni and Ramos v. Guanzon and
Guanzon, L-10423, Jan. 1958).
Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for
which it is intended and in such a way as not to injure the
interest of the co-ownership or prevent the other co-owners
from using it according to their rights. The purpose of the
co-ownership may be changed by agreement, express or implied.
COMMENT:
(1) Right to Use Property Owned in Common
This article grants each co-owner the right to use the
property for the purpose intended (said purpose being alterable
by express or implied agreement). BUT —
(a)
the interest of the co-ownership must not be injured
or prejudiced;
(b)
and the other co-owners must not be prevented from
using it.
Pardell v. Bartolome
23 Phil. 450
(BAR)
FACTS: A and B owned in common a two-story
house. The upper floor was used as a dwelling; the lower
was available for rent by stores. If A lives in a room of
the upper floor, and uses a room of the lower floor as an
office, can B demand rent?
HELD: (a) No rent for the upper floor can be demanded, for A was exercising her right as co-owner, without
prejudicing B who, had she wanted, could have also lived
in another room of said floor, and who therefore could not
have been prejudiced.
323
Art. 487
CIVIL CODE OF THE PHILIPPINES
(b) Half-rental may be demanded for the use of the
lower floor. Rent could be asked because others could have
rented the same, but only half should be given because A
was co-owner. (See also 3 Manresa 441).
(2) Apartment Houses
Accessorias or apartments are built either for residential
purposes or for stores; accordingly, the occupant may generally
use them for either of such purposes. (Villaroman v. Arriola,
CA-GR No. 710-R, June 11, 1948; 46 O.G. 152, Jan. 1950).
Art. 487. Any one of the co-owners may bring an action
in ejectment.
COMMENT:
(1) Art. 487 Now Allows a Co-Owner To Bring An Action For
Ejectment Which Covers All Kinds of Actions for the
Recovery of Possession, Including Forcible Entry and
Unlawful Detainer, Without the Necessity of Joining All
the Other Co-Owners As Co-Plaintiffs, Because the Said
Is Deemed to be Instituted For the Benefit of All
Mendoza v. Coronel
482 SCRA 353 (2006)
Since Art. 487 of the new Civil Code authorizes any one
of the co-owners to bring an action for ejectment and the suit
is deemed to be instituted for the benefit of all, without the
owners actually giving consent to the suit, it follows that an
attorney-in-fact –– of the plaintiff co-owner does not need authority from all the co-owners he needs authority only from the
co-owner instituting the ejectment suit.
(2) Right of Co-owners to Bring an Action in Ejectment
One right of a co-owner is to defend in court the interests
of the co-ownership. In the old case of Palarca v. Baguisi, 38
Phil. 177, it was held that to bring an action for ejectment, all
the co-owners must institute the suit. Art. 487 reverses said
324
CIVIL CODE OF THE PHILIPPINES
Art. 487
ruling, hence today, one co-owner may himself bring the action.
(3) Reason for the Article
The presumption is that the case instituted by one was
really in behalf of ALL. (TS, June 5, 1918). After all, in one
sense, a co-owner owns and possesses the whole; moreover,
ejectment cases are urgent and summary in character.
[NOTE: It is understood, of course, that the action is being
instituted for all. Hence, if the co-owner expressly states that he
is bringing the case only for himself, the action should not be
allowed to prosper. (TS, June 17, 1927).].
(4) Actions Covered by the Term ‘Ejectment’
It is believed that “ejectment” here covers the following
actions:
(a)
(b)
(c)
(d)
(e)
(f)
forcible entry;
unlawful detainer;
accion publiciana;
accion reivindicatoria;
quieting of title;
replevin.
Lao v. CA
84 SCAD 341
(1997)
As a general rule, the main issue in an ejectment
suit is possession de facto, not possession de jure. In the
event the issue of ownership is raised in the pleadings,
such issue shall be taken up only for the limited purpose
of determining who between the contending parties has
the better right to possession.
Where neither party, however, objects to the allegation of the question of ownership — which may be
initially improvident or improper — in an ejectment suit
and, instead, both present evidence thereon, argue the
325
Art. 487
CIVIL CODE OF THE PHILIPPINES
question in their various submissions and participate in
all aspects of the trial without objecting to the Metropolitan (or Municipal) Trial Court’s jurisdiction to decide the
question of ownership, the Regional Trial Court — in the
exercise of its original jurisdiction as authorized by Sec.
11, Rule 40 of the Rules of Court — may rule on the issue
and the corollary question of whether the subject deed is
one of sale or of equitable mortgage.
Gachon v. Devera, Jr.
84 SCAD 12
(1997)
In ejectment cases, the only issue for resolution is
physical or material possession of the property involved,
independent of any claim of ownership set forth by any of
the party-litigants. Anyone of them who can prove prior
possession de facto may recover such possession even from
the owner himself.
This rule holds true regardless of the character of
a party’s possession, provided that he has in his favor
priority of time which entitles him to stay on the property
until he is lawfully ejected by a person having a better
right by either accion publiciana or accion reivindicatoria.
It has been ruled that the institution of a separate
action for quieting of title is not a valid reason for defeating the execution of the summary remedy of ejectment.
Corpuz v. CA
83 SCAD 744
(1997)
The inferior court may look into the evidence of
title or ownership and possession de jure insofar as said
evidence would indicate or determine the nature of possession. It cannot, however, resolve the issue of ownership,
i.e., by declaring who among the parties is the true and
lawful owner of the subject property, because the resolution of said issue would effect an adjudication on owner326
CIVIL CODE OF THE PHILIPPINES
Art. 487
ship which is not sanctioned in the summary action for
unlawful detainer.
With this as premise and taking into consideration
the amendment introduced by Batas Pambansa Blg. 129,
it may be suggested that inferior courts are now conditionally vested with adjudicatory power over the issue of title
or ownership raised by the parties in an ejectment suit.
The prevailing doctrine is that suits or actions for
the annulment of sale, title, or document do not abate any
ejectment action respecting the same property.
Sabina Santiago, et al. v. J.M. Tuason & Co., Inc.
L-14223, Nov. 23, 1960
(a) A decision in a suit to quiet title brought against
one co-owner by a 3rd party is not RES JUDICATA with
respect to the other co-owners because co-owners as such
are not privies inter se in relation to the property owned
in common.
(b) HOWEVER, a statement in said suit stating
that the document relied upon by the co-owners’ predecessor-in-interest did NOT give title to said predecessor, is
BINDING on said co-owners, for regarding this aspect,
they may be considered as PRIVIES or successors-in-interest. If their predecessor-father was NOT the owner of the
land, they, the children cannot be considered as co-heir
or co-owners.
De Guia v. CA
413 SCRA 114
(2003)
Facts: A co-owner of an undivided parcel of land is an
owner of the whole, and over the whole he exercises the
right of dominion but he is at the same time the owner of
a portion which is truly abstract. Issue: Considering such
circumstance, is there co-ownership when the different
portions owned by different people are already concretely
determined and separately identifiable even if not yet
technically described?
327
Art. 488
CIVIL CODE OF THE PHILIPPINES
Held: No. For that matter, any co-owner, may file an
action under Art. 487 not only against a third person but
also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.
Each co-owner may demand at any time the partition of
the common property unless a co-owner has repudiated
the co-ownership under certain conditions.
Art. 488. Each co-owner shall have a right to compel
the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the
taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest
as may be equivalent to his share of the expenses and taxes.
No such waiver shall be made if it is prejudicial to the coownership.
COMMENT:
(1) Expenses for Preservation
A co-owner has the right to compel the others to share
in the expenses of preservation, even if incurred without prior
notification to them (since the expenses are necessary) BUT he
must notify if practicable. (Art. 489).
(2) How a Co-owner May Exempt Himself
A co-owner may exempt himself from this duty to reimburse by RENOUNCING (abandoning for the benefit of the
others) so much of his undivided share as may be equivalent
to his share of the expenses and taxes.
[NOTE: The one renouncing DOES NOT necessarily renounce his entire interest in the co-ownership.].
[NOTE FURTHER that the renouncing cannot be done if
the co-ownership will be prejudiced.].
(3) What the Renouncing Requires
(a)
If the renouncing is in favor of the creditor, said creditor
must give his consent (for this would be a case of adjudi328
CIVIL CODE OF THE PHILIPPINES
Art. 488
cacion en pago or datio in solutum, where a debtor gives
something else in payment of his debt).
(b)
If the renouncing is in favor of the other co-owners, a novation (in the form of substitution of debtor) would result
— necessitating the consent of said other co-owners AND
of the creditor.
[NOTE: The creditor’s consent would of course be
needed only if the expenses have already been incurred,
otherwise, there would as yet be no creditors.].
(4) What Reimbursement Covers
Reimbursement covers only NECESSARY EXPENSES,
like those for the preservation of a house in a ruinous condition (Trinidad v. Ricafort, et al., 7 Phil. 449) and not for useful improvements, even if the value of the property is thereby
increased, the purpose of the co-ownership not being for profit.
(See 3 Manresa 446).
(5) Reimbursement from the Estate of a Deceased Co-owner
Reimbursement can be had from the estate of a deceased
co-owner, provided no renunciation has been made. (Hibberd
v. Estate of McElroy, 25 Phil. 164).
(6) When Renunciation Cannot be Implied
Renunciation cannot be implied by mere refusal to pay
the proportionate share. (3 Manresa 452). If there is refusal to
pay, but no renunciation, the creditors can still collect from the
delinquent co-owner. Here, the other co-owners do not have to
intervene, for they are not the ones prejudiced.
(7) Example When Renunciation or Waiver Cannot be Made
Because it is Prejudicial to the Co-ownership
X and Y are co-owners of a house badly in need of repairs in order to prevent a collapse. BEFORE expenses are
incurred, X cannot renounce if Y does not have enough money
329
Art. 489
CIVIL CODE OF THE PHILIPPINES
to cover all expenses. Y can therefore go ahead, contract with
the repairmen, and X would still be liable despite his previous
“renunciation.” This is because if Y does not go ahead, prejudice
would be caused to the co-ownership.
Art. 489. Repairs for preservation may be made at the
will of one of the co-owners, but he must, if practicable,
first notify his co-owners of the necessity for such repairs.
Expenses to improve or embellish the thing shall be decided
upon by a majority as determined in Article 492.
COMMENT:
(1) Number of Co-owners Who Must Consent
(a)
Repairs, ejectment action — ONE. (Art. 489).
(b)
Alterations or acts of OWNERSHIP — ALL. (Art. 491).
(c)
All others, like useful improvements, luxurious embellishments, administration and better enjoyment — FINANCIAL MAJORITY (not numerical). (Art. 492 and Art.
489).
(2) Rule as to Necessary Repairs
Can a co-owner go ahead with necessary repairs even
against the opposition of all the rest?
ANS.: Yes, because the negligence of the others should not
prejudice him. (3 Manresa 448). If he has money, he may advance the funds, and recover later from the others. (3 Sanchez
Roman 177). If he has NO money in the meantime, he can
contract with the repairmen, and all the co-owners will be liable proportionately to the creditors. Here, they may renounce
their shares in the co-ownership (equivalent to their share of
the expenses) IN FAVOR of the CREDITORS (provided the
latter agree — DATIO IN SOLUTUM); or make the renouncing
in favor of the conscientious co-owner (provided that said coowner agrees to assume that obligation — DATIO EN PAGO;
and provided that the creditors agree — NOVATION or change
of debtor, Arts. 1244, 1245). Otherwise, no renouncing can be
done and they would still be indebted.
330
CIVIL CODE OF THE PHILIPPINES
Art. 490
(3) Problem (Where Necessary Repairs Are Not Undertaken)
Because of the unjustified opposition of the majority of
the co-owners, necessary repairs urged by one were not undertaken, and damage resulted. Who will be responsible for said
damages?
ANS.: Those who made the unjustified opposition. (3
Manresa 448).
(4) Rule If No Notification Was Made
The law says: “But he must, if practicable, first notify his
co-owners ...” Suppose, though it was practicable to do so, no
notification was made, would the rest still be liable?
ANS.: Yes, since the repairs were essential. It must be
remembered that even if the rest would expressly object, the
repairs can go on just the same. However, in view of the lack
of notification, the others may state in their behalf, that had
they been notified, they could have helped look for cheaper
labor and materials, and that therefore they should pay less
than what is being charged them. In such a case, the co-owner
who neglected to make the notification must take care of the
difference.
[NOTE: “Practicable” means that something can be done;
“practical” means useful.].
Art. 490. Whenever the different stories of a house belong
to different owners, if the titles of ownership do not specify
the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject,
the following rules shall be observed:
(1) The main and party walls, the roof and the other
things used in common, shall be preserved at the expense of
all the owners in proportion to the value of the story belonging to each;
(2) Each owner shall bear the cost of maintaining the
floor of his story; the floor of the entrance, front door, com331
Art. 490
CIVIL CODE OF THE PHILIPPINES
mon yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata;
(3) The stairs from the entrance to the first story shall
be maintained at the expense of all the owners pro rata, with
the exception of the owner of the ground floor; the stairs
from the first to the second story shall be preserved at the
expense of all, except the owner of the ground floor and the
owner of the first story; and so on successively.
COMMENT:
(1) Perpendicular Co-ownership
This is not an ordinary case of co-ownership where all the
floors and everything else belong to all co-owners. Here, we
have a case of “perpendicular co-ownership” where the different
stories belong to different persons. This is still co-ownership for
there is some unity in the use or ornamentation of the property,
particularly in the main and common walls, roof, stairs, etc.
This is uncommon in our country.
[NOTE: The rules enumerated in the Article apply only
if there is no contrary provision in the titles of ownership or
agreement.].
[NOTE: If the various units are in one plane — as when
one-story units all set on the ground — the co-ownership may
be referred to as a horizontal co-ownership. A combination of
both perpendicular and horizontal co-ownership can result in
a situation very similar to a condominium which may be in
the form of a building consisting of several stories, each story
being by itself divided into different units, owned by different
persons. Note that each unit cannot be considered owned in
common. Under the Condominium Law, a condominium corporation can be formed — to take care of common property, like
the common stairs, common halls, etc.].
(2) The Rules Themselves
(a)
Proportionate contribution is required for the preservation
of —
1)
the main walls;
332
CIVIL CODE OF THE PHILIPPINES
Art. 490
2)
the party walls;
3)
the roof (this is really used by ALL); and
4)
the other things used in common.
(b)
Each floor owner must bear the expenses of his floor.
(c)
Stairs are to be maintained from story to story, by the
users.
(3) Ground Floor Distinct from the First Story
Under Art. 490, it is evident that the ground floor, if there
is any, is distinguished from the first story.
(4) The Condominium Act (Republic Act 4726, effective upon
its approval. The Act was approved by Congress on June
18, 1966.)
Republic Act 4726
THE CONDOMINIUM ACT
AN ACT TO DEFINE CONDOMINIUM, ESTABLISH
REQUIREMENTS FOR ITS CREATION, AND GOVERN
ITS INCIDENTS.
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
Section 1. The short title of this Act shall be “The Condominium Act.”
Section 2. A condominium is an interest in real property
consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in
common directly or indirectly, in the land on which it is located
and in other common areas of the building. A condominium
may include, in addition, a separate interest in other portions
of such real property. Title to the common areas, including the
land, or the appurtenant interests in such areas, may be held
by a corporation specially formed for the purpose (hereinafter
known as the “condominium corporation”) in which the hold333
Art. 490
CIVIL CODE OF THE PHILIPPINES
ers of separate interests shall automatically be members or
shareholders, to the exclusion of others, in proportion to the
appurtenant interest of their respective units in the common
areas.
The interests in condominium may be ownership or any
other real right in real property recognized by the law of property in the Civil Code and other pertinent laws.
Section 3. As used in this Act, unless the context otherwise
requires:
(a) “Condominium’’ means a condominium as defined in the next preceding section.
(b) “Unit’’ means a part of the condominium project
intended for any type of independent use or ownership,
including one or more rooms or spaces located in one
or more floors (or part or parts of floors) in a building
or buildings and such accessories as may be appended
thereto.
(c) “Project’’ means the entire parcel of real property divided or to be divided in condominiums, including
all structures thereon.
(d) “Common areas’’ means the entire project excepting all units separately granted or held or reserved.
(e) “To divide’’ real property means to divide the
ownership thereof or other interest therein by conveying
one or more condominiums therein but less than the whole
thereof.
Section 4. The provisions of this Act shall apply to property divided or to be divided into condominiums only if there
shall be recorded in the Register of Deeds of the province or
city in which the property lies, and duly annotated in the corresponding certificate of title of the land, if the latter had been
patented or registered under either the Land Registration or
Cadastral Acts, an enabling or master deed which shall contain,
among others, the following:
(a) Description of the land on which the building
or buildings and improvements are or to be located;
334
CIVIL CODE OF THE PHILIPPINES
Art. 490
(b) Description of the building or buildings, stating
the number of stories and basements, the number of units
and their accessories, if any;
(c)
Description of the common areas and facili-
ties;
(d) A statement of the exact nature of the interest
acquired or to be acquired by the purchaser in the separate
units and in the common areas of the condominium project.
Where title to or the appurtenant interests in the common
areas is or is to be held by a condominium corporation, a
statement to this effect shall be included;
(e) Statement of the purposes for which the building or buildings and each of the units are intended or
restricted as to use;
(f) A certificate of the registered owner of the
property, if he is other than those executing the master
deed, as well as of all registered holders of any lien or
encumbrance on the property, that they consent to the
registration of the deed;
(g) The following plans shall be appended to the
deed as integral parts thereof:
1.
A survey plan of the land included in the
project, unless a survey plan of the same property
had previously been filed in said office;
2.
A diagrammatic floor plan of the building
or buildings in the project, in sufficient detail to identify each unit, its relative location and approximate
dimensions;
(h) Any reasonable restriction not contrary to
law, morals, or public policy regarding the right of any
condominium owner to alienate or dispose of his condominium.
The enabling or master deed may be amended or revoked
upon registration of an instrument executed by a simple majority of the registered owners of the property: Provided, That
in a condominium project exclusively for either residential or
335
Art. 490
CIVIL CODE OF THE PHILIPPINES
commercial use, simple majority shall be on a per unit of ownership basis and that in the case of mixed use, simple majority
shall be in a floor area of ownership basis: Provided, further,
That prior notifications to all registered owners are done: and
Provided, finally, That any amendment or revocation already
decided by a simple majority of all registered owners shall be
submitted to the Housing and Land Use Regulatory Board
and the city/municipal engineer for approval before it can be
registered. Until registration of a revocation, the provisions of
this Act shall continue to apply to such property. (As amended
by RA No. 7899).
Section 5. Any transfer or conveyance of a unit or an
apartment, office or store or other space therein, shall include
the transfer or conveyance of the undivided interest in the common areas or, in a property case, the membership or shareholdings in the condominium corporation; PROVIDED, However,
that where the common areas in the condominium project are
held by the owners of separate units as co-owners thereof, no
condominium unit therein shall be conveyed or transferred to
persons other than Filipino citizens or corporations at least 60%
of the capital stock of which belong to Filipino citizens, except
in cases of hereditary succession. Where the common areas in
a condominium project are held by a corporation, no transfer or
conveyance of a unit shall be valid if the concomitant transfer
of the appurtenant membership or stockholding in the corporation will cause the alien interest in such corporation to exceed
the limits imposed by existing laws.
Section 6. Unless otherwise expressly provided in the
enabling or master deed or the declaration of restrictions, the
incidents of a condominium grant are as follows:
(a) The boundary of the unit granted are the
interior surfaces of the perimeter walls, floors, ceilings,
windows and door thereof. The following are not part of
the unit; bearing walls, columns, floors, roofs, foundations
and other common structural elements of the building;
lobbies, stairways, hallways, and other areas of common
use; elevator equipment and shafts, central heating, central refrigeration and central airconditioning equipment,
reservoirs, tanks, pumps and other central services and
336
CIVIL CODE OF THE PHILIPPINES
Art. 490
facilities, pipes, ducts, flues, chutes, conduits, wires and
other utility installations, wherever located, except the
outlets thereof when located within the unit.
(b) There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the use of the
air space encompassed by the boundaries of the unit as
it exists at any particular time and as the unit may lawfully be altered or reconstructed from time to time. Such
easement shall be automatically terminated in any air
space upon destruction of the unit as to render it untenantable.
(c) Unless otherwise provided, the common areas
are held in common by the holders of units, in equal
shares one for each unit.
(d) A non-exclusive easement for ingress, egress
and support through the common areas is appurtenant
to each unit and the common areas are subject to such
easements.
(e) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper or otherwise
refinish and decorate the inner surface of the walls, ceilings, floors, windows and doors bounding his own unit.
(f) Each condominium owner shall have the exclusive right to mortgage, pledge or encumber his condominium and to have the same appraised independently
of the other condominium but any obligation incurred by
such condominium owner is personal to him.
(g) Each condominium owner has also the absolute
right to sell or dispose of his condominium unless the
master deed contains a requirement that the property be
first offered to the condominium owners within a reasonable period of time before the same is offered to outside
parties.
Section 7. Except as provided in the following section, the
common areas shall remain undivided, and there shall be no
judicial partition thereof.
337
Art. 490
CIVIL CODE OF THE PHILIPPINES
Section 8. Where several persons own condominiums in a
condominium project, an action may be brought by one or more
such persons for partition thereof by sale of the entire project,
as if the owners of all the condominiums in such project were
co-owners of the entire project in the same proportion as their
interests in the common areas: PROVIDED, however, That a
partition shall be made only upon a showing:
(a) That three years after damage or destruction
to the projects which render a material part thereof unfit
for its use prior thereto, the project has not been rebuilt
or repaired substantially to its state prior to its damage
or destruction; or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein untenantable and that condominium owners holding in aggregate
more than 30 per cent interest in the common areas are
opposed to repair or restoration of the projects; or
(c) That the project has been in existence in excess
of 50 years, that it is obsolete and uneconomic, and that
condominium owners holding in aggregate more than
50 per cent interest in the common areas are opposed to
repair or restoration or modelling or modernizing of the
project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the project is no
longer viable, or that the condominium owners holding in
aggregate more than 70 per cent interest in the common
areas are opposed to continuation of the condominium
regime after expropriation or condemnation of a material
portion thereof; or
(e) That the conditions for such partition by sale set
forth in the declaration of restrictions duly registered in
accordance with the terms of this Act, have been met.
Section 9. The owner of a project shall, prior to the conveyance of any condominium therein, register a declaration of
restrictions relating to such project, which restrictions shall
constitute a lien upon each condominium in the project, and
shall inure to and bind all condominium owners in the projects.
338
CIVIL CODE OF THE PHILIPPINES
Art. 490
Such liens, unless otherwise provided, may be enforced by any
condominium owner in the project or by the management body
of such project. The Register of Deeds shall enter and annotate
the declaration of restrictions upon the certificate of title covering the land included within the project, if the land is patended
or registered under the Land Registration or Cadastral Acts.
The declaration of restrictions shall provide for the management of the project by anyone of the following management
bodies: a condominium corporation, an association of the condominium owners, a board of governors elected by condominium
owners, or a management agent elected by the owners or by
the board named in the declaration. It shall also provide for
voting majorities, quorums, notices, meeting date, and other
rules governing such body or bodies.
Such declaration of restrictions, among other things, may
also provide:
(a)
As to any management body
1.
For the powers thereof, including power to
enforce the provisions of the declarations of restrictions;
2.
For maintenance of insurance policies
insuring condominium owners against loss by fire,
casualty, liability, workmen’s compensation and
other insurable risks, and for bonding of the members of any management body;
3.
Provisions for maintenance, utility, gardening and other services benefiting the common
areas, for the employment of personnel necessary for
the operation of the building, and legal, accounting
and other professional and technical services;
4.
For purchase of materials, supplies and
the like needed by the common areas;
5.
For payment of taxes and special assessments which would be a lien upon the entire
project or common areas, and for discharge of any
encumbrance levied against the entire project or the
common areas;
339
Art. 490
CIVIL CODE OF THE PHILIPPINES
6.
For reconstruction of any portion or
portions of any damage to or destruction of the
project;
7.
The manner for delegation of its powers;
8.
For entry by its officers and agents into
any unit when necessary in connection with the
maintenance or construction for which such body is
responsible;
9.
For a power of attorney to the management body to sell the entire project for the benefit
of all of the owners thereof when partition of the
project may be authorized under Section 8 of this
Act, which said power shall be binding upon all of
the condominium owners regardless of whether they
assume the obligations of the restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than a
majority in interest of the owners is obtained;
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet authorized
expenditures, each condominium unit to be assessed separately for its share of such expenses in proportion (unless
otherwise provided) to its owner’s fractional interest in
any common areas;
(e) For the subordination of the liens securing such
assessments to other liens either generally or specifically
described;
(f) For conditions, other than those provided for in
Sections 8 and 13 of this Act, upon which partition of the
project and dissolution of the condominium corporation
may be made. Such right to partition or dissolution may
be conditioned upon failure of the condominium owners to
rebuild within a certain period or upon specified percentage of damage to the building, or upon a decision of an
arbitrator, or upon any other reasonable condition.
340
CIVIL CODE OF THE PHILIPPINES
Art. 490
Section 10. Whenever the common areas in a condominium
project are held by a condominium corporation, such corporation shall constitute the management body of the project. The
corporate purposes of such a corporation shall be limited to the
holding of the common areas; either in ownership or any other
interest in real property recognized by law, to the management
of the project, and to such other purpose as may be necessary,
incidental or convenient to the accomplishment of said purposes. The articles of incorporation or by-laws of the corporation shall not contain any provision contrary to or inconsistent
with the provisions of this Act, the enabling or master deed, or
the declaration of restrictions of the project. Membership in a
condominium corporation, regardless of whether it is a stock
or non-stock corporation, shall not be transferable separately
from the condominium unit of which it is an appurtenance.
When a member or a stockholder ceases to own a unit in the
project in which the condominium corporation owns or holds
the common areas, he shall automatically cease to be a member
or stockholder of the condominium corporation.
Section 11. The term of a condominium corporation shall
be coterminous with the duration of the condominium project,
the provisions of the Corporation Law to the contrary notwithstanding.
Section 12. In case of involuntary dissolution of a condominium corporation for any of the causes provided by law, the
common areas owned or held by the corporation shall, by way
of liquidation, be transferred pro-indiviso and in proportion to
their interest in the corporation to the members or stockholders thereof, subject to the superior rights of the corporation’s
creditors. Such transfer or conveyance shall be deemed to be
a full liquidation of the interest of such members or stockholders in the corporation. After such transfer or conveyance, the
provisions of this Act governing undivided co-ownership of,
or undivided interest in, the common areas in condominium
projects shall fully apply.
Section 13. Until the enabling or the master deed of the
project in which the condominium corporation owns or holds
the common areas is revoked, the corporation shall not be
341
Art. 490
CIVIL CODE OF THE PHILIPPINES
voluntarily dissolved through an action for dissolution under
Rule 104 of the Rules of Court except upon a showing:
(a) That three years after damage or destruction
to the project in which the corporation owns or holds the
common areas, which damage or destruction renders a
material part thereof unfit for its use prior thereto, the
project has not been rebuilt or repaired substantially to
its state prior to its damage or destruction; or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein untenantable and that more than 30 per cent of the members of the
corporation, if non-stock, or the share-holders representing more than 30 per cent of the capital stock entitled to
vote, if a stock corporation, are opposed to the repair or
reconstruction of the project; or
(c) That the project has been in existence in excess
of 50 years, that it is obsolete and uneconomical, and that
more than 50 per cent of the members of the corporation,
if non-stock, or the stockholders representing more than
50 per cent of the capital stock entitled to vote, if a stock
corporation are opposed to the repair or restoration or
remodelling or modernizing of the project; or
(d) That the project or material part thereof has
been condemned or expropriated and that the project is
no longer viable or that the members holding in aggregate
more than 70% interest in the corporation, if non-stock,
or the stockholders representing more than 70% of the
capital stock entitled to vote, if a stock corporation, are
opposed to the continuation of the condominium regime
after expropriation or condemnation of a material portion
thereof; or
(e) That the conditions for such a dissolution set
forth in the declaration of restrictions of the project in
which the corporation owns or holds the common areas,
have been met.
Section 14. The condominium corporation may also be
dissolved by the affirmative vote of all the stockholders or
members thereof at a general or special meeting duly called for
342
CIVIL CODE OF THE PHILIPPINES
Art. 490
the purpose: PROVIDED, That all the requirements of Section
62 of the Corporation Law are complied with.
Section 15. Unless otherwise provided for in the declaration of restrictions, upon voluntary dissolution of a condominium corporation in accordance with the provisions of Sections
13 and 14 of this Act, the corporation shall be deemed to hold
a power of attorney from all the members or stockholders to
sell and dispose of their separate interests in the project and
liquidation of the corporation shall be effected by a sale of the
entire project as if the corporation owned the whole thereof,
subject to the rights of the corporation and of individual condominium creditors.
Section 16. A condominium corporation shall not, during
its existence, sell, exchange, lease or otherwise dispose of the
common areas owned or held by or in the condominium project
unless authorized by the affirmative vote of a simple majority
of the registered owners: Provided, That prior notifications to
all registered owners are done: and Provided, further, That the
condominium corporation may expand or integrate the project
with another upon the affirmative vote of a simple majority of
the registered owners, subject only to the final approval of the
Housing and Land Use Regulatory Board. (As amended by RA
No. 7899).
Section 17. Any provision of the Corporation Law to the
contrary notwithstanding, the by-laws of a condominium corporation shall provide that a stockholder or member shall not be
entitled to demand payment of his shares or interest in those
cases where such right is granted under the Corporation Law
unless he consents to sell his separate interest in the project
to the corporation or to any purchaser of the corporation’s
choice who shall also buy from the corporation the dissenting
member or stockholder’s interest. In case of disagreement as
to price, the procedure set forth in the appropriate provision of
the Corporation Law for valuation of shares shall be followed.
The corporation shall have two years within which to pay for
the shares or furnish a purchaser of its choice from the time
of award. All expenses incurred in the liquidation of the interest of the dissenting member or stockholder shall be borne by
him.
343
Art. 490
CIVIL CODE OF THE PHILIPPINES
Section 18. Upon registration of an instrument conveying
a condominium, the Register of Deeds shall, upon payment
of the proper fees, enter and annotate the conveyance on
the certificate of title covering the land included within the
project and the transferee shall be entitled to the issuance of
a “condominium owner’s” copy of the pertinent portion of such
certificate of title. Said “condominium owner’s” copy need not
reproduce the ownership status or series of transactions in
force or annotated with respect to other condominiums in the
project. A copy of the description of the land, a brief description
of condominium conveyed, name and personal circumstances
of the condominium owner would be sufficient for purposes of
the “condominium owner’s” copy of the certificate of title. No
conveyance of condominiums or part thereof, subsequent to
the original conveyance thereof from the owner of the project,
shall be registered unless accompanied by a certificate of the
management body of the project that such conveyance is in accordance with the provisions of the declaration of restrictions
of such project.
In cases of condominium projects registered under the provisions of the Spanish Mortgage Law or Act 3344, as amended,
the registration of the deed of conveyance of a condominium
shall be sufficient if the Register of Deeds shall keep the original or signed copy thereof, together with the certificate of the
management body of the project, and return a copy of the deed
of conveyance to the condominium owner duly acknowledged
and stamped by the Register of Deeds in the same manner as
in the case of registration of conveyances or real property under
said laws.
Section 19. Where the enabling or master deed provides
that the land included within a condominium project are to
be owned in common by the condominium owners therein, the
Register of Deeds may, at the request of all the condominium
owners and upon surrender of all their “condominium owner’s”
copies, cancel the certificates of title of the property and issue
a new one in the name of said condominium owners as proindiviso co-owners thereof.
Section 20. An assessment upon any condominium made
in accordance with a duly registered declaration of restrictions
344
CIVIL CODE OF THE PHILIPPINES
Art. 490
shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus
any other charges thereon, such as interests, costs (including
attorney’s fees) and penalties, as such may be provided for in
the declaration of restrictions, shall be and become a lien upon
the condominium assessed when the management body causes
a notice of assessment to be registered with the Register of
Deeds of the city or province where such condominium project
is located. The notice shall state the amount of such assessment
and such other charges thereon as may be authorized by the
declaration of restrictions, a description of the condominium
unit against which same has been assessed, and the name of
the registered owner thereof. Such notice shall be signed by
an authorized representative of the management body or as
otherwise provided in the declaration of restrictions. Upon
payment of said assessment and charges or other satisfaction
thereof, the management body shall cause to be registered a
release of the lien.
Such lien shall be superior to all other liens registered
subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of
restrictions may provide for the subordination thereof to any
other liens and encumbrances.
Such lien may be enforced in the same manner provided
for by law for the judicial or extra-judicial foreclosure of mortgages of real property. Unless otherwise provided for in the
declaration of the restrictions, the management body shall
have power to bid at foreclosure sale. The condominium owner
shall have the same right of redemption as in cases of judicial
or extra-judicial foreclosure of mortgages.
Section 21. No labor performed or services or materials
furnished without the consent of or at the request of a condominium owner or his agent or his contractor or subcontractor, shall be the basis of a lien against the condominium of
any other condominium owner, unless such other owner has
expressly consented to or requested the performance of such
labor or furnishing of such materials or services. Such express
consent shall be deemed to have been given by the owner of any
condominium in case of emergency repairs to his condominium
345
Art. 490
CIVIL CODE OF THE PHILIPPINES
unit. Labor performed or services or materials furnished for
the common areas, if duly authorized by the management body
provided for in a declaration of restrictions governing the property, shall be deemed to be performed or furnished with the
express consent of each condominium owner. The owner of any
condominium may remove his condominium from a lien against
two or more condominiums or any part thereof by payment to
the holder of the lien of the fraction of the total sum secured
by such lien which is attributable to his condominium unit.
Section 22. Unless otherwise provided for by the declaration of restrictions, the management body, provided for herein,
may acquire and hold, for the benefit of the condominium owners, tangible and intangible personal property and may dispose
of the same by sale or otherwise; and the beneficial interest
in such personal property shall be owned by the condominium
owners in the same proportion as their respective interests in
the common areas. A transfer of a condominium shall transfer
to the transferee ownership of the transferor’s beneficial interest in such personal property.
Section 23. Where, in an action for partition of a condominium project or for the dissolution of condominium corporation on the ground that the project or a material part thereof
has been condemned or expropriated, the court finds that the
conditions provided in this Act or in the declarations have not
been met, the court may decree a reorganization of the project,
declaring which portion or portions of the project shall continue
as a condominium project, the owners thereof, and the respective rights of the remaining owners and the just compensation,
if any, that a condominium owner may be entitled due to deprivation of his property. Upon receipt of a copy of the decree,
the Register of Deeds shall enter and annotate the same on
the pertinent certificate of title.
Section 24. Any deed, declaration or plan for a condominium project shall be liberally construed to facilitate the
operation of the project, and its provisions shall be presumed
to be independent and severable.
Section 25. Whenever real property has been divided into
condominiums, each condominium separately owned shall be
346
CIVIL CODE OF THE PHILIPPINES
Art. 490
separately assessed, for purposes of real property taxation and
other tax purposes, to the owners thereof and tax on each such
condominium shall constitute a lien solely thereon.
Section 26. All Acts or parts of Acts in conflict or inconsistent with this Act are hereby amended insofar as condominiums
and its incidents are concerned.
Section 27. This Act shall take effect upon its approval.
Approved, 18 June 1966.
(5) When Is Ownership Acquired?
Condominium Corporation v. Campos, Jr.
104 SCRA 295
The buyer of a unit in a condominium acquires ownership
over the unit only after he has paid in full its purchase price.
(6) ‘Separate Interest’
Condominium Corporation v. Campos, Jr.
(Supra)
The ownership of a condominium unit is the “separate
interest’’ of the owner which makes him automatically a shareholder in the condominium.
(7) Other Instances
Union Bank v. Housing and
Land Use Regulatory Board
210 SCRA 558
(1992)
The act of a subdivision developer of mortgaging the subdivision without notifying an installment buyer is violative of
PD 957. Said case falls under the exclusive jurisdiction of the
Housing and Land Use Regulatory Board.
347
Art. 491
CIVIL CODE OF THE PHILIPPINES
Skyworld Condominium Owners
Association v. SEC
211 SCRA 565
(1992)
All incorporators of a condominium corporation must be
an owner of a condominium unit.
Casa Filipina Realty
Corp. v. Office of the President
58 SCAD 773
(1995)
PD 947 was designed to stem the tide of “fraudulent
manipulations perpetrated by unscrupulous subdivision and
condominium sellers and operators, such as failure to deliver
titles to buyers or titles free from liens and encumbrances.’’
G.O.A.L., Inc. v. CA
85 SCAD 159
(1997)
In a condominium, common areas and facilities are “portions of condominium property not included in the units,’’
whereas, a unit is “a part of the condominium property which
is to be subject to private ownership.’’
Inversely, that which is not considered a unit should fall
under common areas and facilities. Hence, the parking spaces
not being subject to private ownership form part of the common
area over which the condominium unit owners hold undivided
interest.
Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in
common, even though benefits for all would result therefrom.
However, if the withholding of the consent by one or more of
the co-owners is clearly prejudicial to the common interest,
the courts may afford adequate relief.
348
CIVIL CODE OF THE PHILIPPINES
Art. 491
COMMENT:
(1) Alterations
This article deals with ALTERATIONS (whether or not
common benefits would result).
(2) ‘Alteration’ Defined
An alteration is a change
(a)
which is more or less permanent;
(b)
which changes the use of the thing; and
(c)
which prejudices the condition of the thing or its enjoyment by the others. [Alteration is an act of ownership;
may be material or metaphysical (change in use); and
gives rise to a real right over the property owned in
common]. (See 3 Manresa 465-466).
(3) Examples of Alterations
(a)
Sale, donation, or mortgage, etc. of the whole property
— Thus, if the entire property is sold without the consent
of some of the co-owners, the sale would not be valid except with respect to the share of the co-owner-seller; and
this is true even if the non-consenting co-owners did not
do anything immediately to oust the buyer. (Mindanao
Academy, Inc., et al. v. Ildefonso D. Yap, L-17681-82, Feb.
26, 1965).
(b)
Sale, donation or mortgage, etc. of a part of the property
but with definite boundaries. (The sale is not void; however, it is subject to the result of the subsequent partition).
(Lopez v. Cuaycong, 74 Phil. 601).
(c)
A voluntary easement. (See Art. 691, par. 1).
(d)
Lease of real property if
1)
the lease is recorded (registered)
2)
or the lease is for more than one year (whether recorded or not). (See Enriquez v. Watson and Co., 22
Phil. 632 and Melencio v. Dy Tiaco Lay, 55 Phil. 99).
349
Art. 491
CIVIL CODE OF THE PHILIPPINES
(Here the leases involve REAL RIGHTS.)
[NOTE: The reason is because said leases are considered not mere acts of administration but acts of ownership
— requiring the consent of ALL the CO-OWNERS. Note
however the existence of a contrary opinion which states
that even if the lease is a REAL RIGHT, still the same
should be considered as a mere act of administration. (See
Enriquez v. Watson and Co., 22 Phil. 623).].
(e)
The construction of a house on a lot owned in common.
(See Javier v. Javier, 6 Phil. 493).
(f)
Any other act of strict dominion or ownership. (See Gala
v. Rodriguez, 70 Phil. 124, where any encumbrance or disposition was held implicitly to be an act of alteration).
(g)
Impliedly, contracts of long duration. (Melencio v. Dy Tiaco
Lay, 55 Phil. 99).
Castro, et al. v. Atienza
L-25014, Oct. 17, 1973
ISSUE: If a co-owner desires to cancel, with respect
to his ideal share, a lease of the property owned in common (participation in a certain business) and then lease
said share in favor of another, does he need the approval
of the other co-owners?
HELD: The approval, concurrence, or consent of the
other co-owners is not essential. [NOTE: Bear in mind that
this deals only with the undivided or ideal share; on the
other hand, a lease of real property, if registered OR if for
over a year, is an act of ownership requiring unanimous
consent on the part of the co-owners.].
(4) BAR
R, S and T are co-owners of a ten-hectare agricultural
land in Quezon City. R is the administrator. S and T are in
Spain. May R convert that land to a memorial park without
the knowledge and consent of S and T? Explain.
ANS.: No, for clearly this conversion constitutes an ALTERATION which by law requires UNANIMITY on the part
350
CIVIL CODE OF THE PHILIPPINES
Art. 491
of all the co-owners unless a judicial order to the contrary is
obtained. (See Art. 491).
(5) Unanimous Consent (Express or Implied)
The law requires unanimous consent for alterations. May
the consent be given impliedly?
ANS.: Yes, but only for the purpose of making the alteration legal. (See 3 Manresa 469-470). Thus, if a co-owner knows
that a house is being constructed on land owned in common but
offers no objection thereto, he cannot demand the demolition
of the building. BUT implied or tacit consent is not enough
to make the other co-owners liable for the expenses for the
construction of the house. (See Javier v. Javier, 6 Phil. 493).
To recover a share of the expenses, the express consent of the
others would be needed. This express consent must be proved
by the one who made the alteration if he desires proportionate
reimbursement. (Javier v. Javier, 6 Phil. 493).
Philippine National Bank v. Court of Appeals
L-34404, June 25, 1980
Conjugal property which is inherited by the surviving
spouse and the children is co-owned. Therefore, the surviving
spouse cannot by herself alone mortgage the property.
(6) ‘Replacement’
“Replacement’’ is not considered an alteration. (Enriquez
v. Watson and Co., 22 Phil. 623).
(7) When an Alteration Is ILLEGAL (Un Verdadero Despojo)
An alteration is illegal when made without the express
or implied consent of the other co-owners. (2 Sanchez Roman
180).
(8) Effects of an Illegal Alteration
(a)
The co-owner responsible may lose what he has spent;
351
Art. 492
CIVIL CODE OF THE PHILIPPINES
(b)
Demolition can be compelled;
(c)
He would be liable for losses and damages;
(d)
BUT whatever benefits the co-ownership derives will
belong to it (3 Manresa 468, 471-472);
(e)
In case a house is constructed on common lot, all the
co-owners will be entitled to a proportionate share of the
rent. (It is wrong to give all to the person who made the
alteration and just let her pay rent on the land). (Singson,
et al. v. Ch. Veloso, et al., [CA] 52 O.G. 370).
Art. 492. For the administration and better enjoyment of
the thing owned in common, the resolutions of the majority
of the co-owners shall be binding.
There shall be no majority unless the resolution is approved by the co-owners who represent the controlling interest in the object of the co-ownership.
Should there be no majority, or should the resolution
of the majority be seriously prejudicial to those interested
in the property owned in common, the court, at the instance
of an interested party, shall order such measures as it may
deem proper, including the appointment of an administrator.
Whenever a part of the thing belongs exclusively to one
of the co-owners, and the remainder is owned in common,
the preceding provisions shall apply only to the part owned
in common.
COMMENT:
(1) Administration and Better Enjoyment
This article concerns:
(a)
administration;
(b)
better enjoyment.
[NOTE: In both cases, a FINANCIAL majority is sufficient.].
352
CIVIL CODE OF THE PHILIPPINES
Art. 492
(2) Acts of Administration or Management
They are those:
(a)
that do not involve an alteration;
(b)
those that may be renewed from time to time;
(c)
those that have transitory effects, that is, do not bind the
co-ownership for a long time in the future;
(d)
those that do not give rise to a real right over the thing
owned in common;
(e)
those, which even if called an alteration, do not affect the
substance or nature of the thing (2 Castan 200-203);
(f)
those for the common benefit of all the co-owners and not
for only one or some of them. (Singson v. Veloso, supra).
[NOTE: All the requisites mentioned must CONCUR.].
(3) Examples of Acts of Administration
(a)
Lease of one year or less (of real property) provided it
is not registered. (See Enriquez v. Watson, 22 Phil. 623;
Melencio v. Dy Tiaco Lay, 55 Phil. 99; Arts. 1647, 1648,
1878, Civil Code).
(b)
Acts of management (such as when by resolution of the
financial majority, one of them is appointed manager
or administrator, and is entrusted with the custody of
jewels owned in common). (Lavadia v. Cosme, 72 Phil.
196; 40 O.G. No. 18, p. 3640). (Also the right of co-heirs
to manage inherited property). (See Alcala v. Pabalan, 19
Phil. 520). (Also, the right to appoint even a stranger as
administrator or agent of the co-ownership, with the rights
and obligations of an agent). (See Gala v. Rodriguez, 70
Phil. 124).
(4) Limitations on the Right of the Financial Majority
(a)
Although they can approve resolutions for administration
and better enjoyment, still before a decision is made, there
should first be a notice to the minority so that they can
be heard. (3 Manresa 488; Singson, et al. v. Veloso, et al.,
[CA] 52 O.G. 870).
353
Art. 493
CIVIL CODE OF THE PHILIPPINES
(b)
The majority would be justified in proceeding only when
the urgency of the case and the difficulty of meeting with
them render impracticable the giving of such notice.
(Singson v. Veloso, supra).
(c)
The minority may APPEAL to the court against the decision of the majority when, for example —
1)
there is no real majority (Art. 492);
2)
the resolution is seriously prejudicial to the rights
of an individual co-owner (Art. 492);
3)
when the majority refuses to correct abuse of administration or maladministration;
4)
when the minority is made the victim of fraud (Manresa);
5)
when an alteration (instead of mere act of administration) is agreed upon.
[NOTE: The court may even appoint an administrator. (Art. 492).].
(d)
Examples of Acts Seriously Prejudicial
1)
When loans are made without sufficient security;
2)
When an encumbrance or disposition is made since
this would be an alteration (See 3 Manresa 481-482;
Gala v. Rodriguez, 70 Phil. 124);
3)
When an abusive or inefficient administrator is not
replaced. (3 Manresa 481-482).
Art. 493. Each co-owner shall have the full ownership of
his part and the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or
the mortgage, with respect to the co-owners, shall be limited
to the portion which may be allotted to him in the division
upon the termination of the co-ownership.
354
CIVIL CODE OF THE PHILIPPINES
Art. 493
COMMENT:
(1) Right With Respect to the Ideal or Proportionate
Share
This article deals not with the right to the whole property
but only with the right to the IDEAL or metaphysical share of
each co-owner.
Cabrera v. CA
GR 108547, Feb. 3, 1997
78 SCAD 705
Under Article 493 of the Civil Code, the heirs as co-owners
shall each have the full ownership of his part and the fruits
and benefits pertaining to it. An heir may, therefore, alienate,
assign or mortgage it, and even substitute another person in
its enjoyment, except when personal rights are involved. But
the effect of the alienation or mortgage, with respect to the coowners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership.
(Go Ong v. CA, GR 75884, Sep. 24, 1987).
(2) Rules Regarding the Ideal Share
(a)
Each co-owner has FULL ownership of his part, and of
his share of the fruits and benefits. (Art. 493).
(b)
And therefore, he may ALIENATE, ASSIGN, or MORTGAGE his (ideal) share (not one with boundaries). (This
is, of course, without prejudice to the exercise by the others of their right of LEGAL REDEMPTION in the proper
case.) (See Art. 493).
Pamplona v. Moreto
L-33187, Mar. 31, 1980
A co-owner may validly sell his undivided share of
the property owned in common. (If the part sold happens
to be his allotted share after partition, the transaction is
entirely valid). Now then, if there has been no express
partition as yet, but the co-owner who sells, points out to
355
Art. 493
CIVIL CODE OF THE PHILIPPINES
his buyers the boundaries of the part he was selling, and
the other co-owners make no objection, there is in effect
already a partial partition, and the sale of the definite
portion can no longer be assailed.
Caro v. Court of Appeals
L-46001, Mar. 25, 1982
Redemption of share of co-owner cannot be effected
if there has already been a partition of the property formerly owned in common. And this is so even if the share
had been sold while the co-ownership was still existing.
(c)
He may even SUBSTITUTE another person in its enjoyment, except when personal rights are involved.
(d)
He may exempt himself from necessary expenses and
taxes by renouncing part of his interest in the co-ownership. (Art. 488).
[NOTE: In case of alienation or mortgage, the effect
is limited to the actual portion which may be given each
when the co-ownership ends. Hence, the transferee does
not get any specific portion (with boundaries) till after
partition. (Lopez v. Ilustre, 5 Phil. 567; Cabuniog v. Magundayao, 26 Phil. 248).].
(3) Unauthorized Sale of the Entire Property
If a co-owner sells the entire common property, the sale
is valid only insofar as his share is concerned, unless the other
co-owners consented to the sale. (Punzalan v. Boon Liat, 44
Phil. 320; Halili v. Lloret, et al., 50 O.G. 2493).
(4) Participation in the Partition in Case of the Alienation
of a Co-owner’s Share
When a co-owner sells his share to a stranger, it is the
stranger who should participate in the partition, and not the
original co-owner, since the vendor has ceased to have an interest in the co-ownership. (Lopez v. Ilustre, supra).
356
CIVIL CODE OF THE PHILIPPINES
Art. 493
(5) Problems
(a)
A, a co-owner was indebted to B. B sued to recover the
debt, and attached A’s share even if A’s share had not
yet been concretely determined. Was the attachment
proper?
HELD: Yes. Attachment was proper though no liquidation, inventory, or participation computation had been
made yet. (See Codag v. Trinamos, [CA] 40 O.G. [4th S.]
No. 8, p. 324).
(b)
A co-owner cannot sell his share to a stranger, if thereby,
there would be a change in the use of the common property.
Example: A, B, and C are the owners respectively of
the 1st, 2nd, and 3rd floors of a house used as a residence.
A cannot sell the ground floor (without the others’ consent)
to a stranger who desires to convert it into a factory, for
here, the interests of the others would be jeopardized. (See
3 Manresa 496-497).
(6) Personal Rights in the Real Rights of Co-ownership
Although a co-ownership is a real right, personal rights
may be involved as when a house is occupied by different coowners as a common dwelling. Here, for a co-owner to substitute another (without the others’ consent), would be to deprive
the others of their privacy. (Hence, the term “personal right”
as used in Art. 493 is not the technical “personal right” as
distinguished from “real right.”).
(7) Some Decided Cases
Punzalan, et al. v. Boon Liat, et al.
44 Phil. 320
FACTS: 22 Moros caught a whale with ambergris (a valuable material) inside its abdomen and they agreed not to sell
it without unanimous consent. But later, one of them sold all.
May the buyer and the seller be sued by the 21 Moros?
357
Art. 493
CIVIL CODE OF THE PHILIPPINES
HELD: Yes. There being a co-ownership, the lone seller
could not be allowed to sell all, hence, the sale is valid only
with respect to his (1/22) share. The lone seller can be sued,
not because he is a co-owner, but because he had acted as if
he were the exclusive owner.
Mainit v. Bandoy
14 Phil. 730
FACTS: Four brothers owned land, but one sold the whole
land. The other three now demand an annulment of the entire
sale. Will annulment prosper?
HELD: Yes, but only insofar as 3/4 of the land is concerned, the sale of the 1/4 being valid since a co-owner may
dispose of his share even without the consent of the others.
Gov’t. v. Abalosa
56 Phil. 504
FACTS: Three people owned land in common. It was
agreed that one would act as trustee and register under the
Torrens system the whole land under his name. Later, an
innocent purchaser for value (without knowledge that a coownership existed) bought the whole land from the co-owner
trustee. The other 2 co-owners sued for the annulment of the
sale. Will the action prosper?
HELD: No, the action will not prosper because the purchaser was an innocent buyer for value, without knowledge of
the existence of the co-ownership. He cannot be blamed for he
had a right to rely on the registration records. The only remedy
left would be for the 2 co-owners to demand indemnification
from the Assurance Fund under the Land Registration Law or
from the trustee.
Ramon Mercado, et al. v. Pio D. Liwanag
L-14429, June 30, 1962
FACTS: Ramon Mercado and Basilia Mercado were registered CO-OWNERS of a parcel of land covered by a Torrens
Certificate of Title. Ramon, without Basilia’s consent, sold his
1/2 share to Pio D. Liwanag whereupon a Transfer Certificate
358
CIVIL CODE OF THE PHILIPPINES
Art. 493
of Title was issued, carrying the names of Pio Liwanag and Basilia Mercado as the “co-owner pro-indiviso.” Is this allowed?
HELD: Yes. After all, Ramon Mercado did NOT sell a
definite part with boundaries; what he sold was only his undivided share of 1/2, and this indeed is what is reflected in the
Transfer Certificate of Title. In no way therefore has Art. 493
been violated.
Diversified Credit Corporation v.
Felipe Rosado and Luz Jayme Rosado
L-27933, Dec. 24, 1968
FACTS: Luz Jayme Rosado, a wife and 12 other persons
owned in common a parcel of land in a subdivision in the City
of Bacolod. Luz’s husband, Felipe Rosado, and Luz herself, constructed, with the use of conjugal funds amounting to P8,000, a
house on the common lot. Sometime later, Luz and the 12 other
co-owners sold the entire lot to the Diversified Credit Corporation, but Luz did not get her husband’s consent. Moreover, the
husband never participated in the sale. When the corporation
sought delivery of the land, and asked the co-owners to vacate
the same, Felipe and his wife refused to vacate on the ground
that under Art. 158 of the Civil Code, the use of conjugal funds
in the construction of the house had converted 1/13 part of the
lot (corresponding to the paraphernal share of the wife) into
conjugal land; that therefore, the sale of said share of the lot
by his wife is void in view of his lack of consent to the transaction. ISSUE: Did the construction of the house with conjugal
funds convert 1/13 of the common lot into conjugal property?
HELD: No, the construction did not convert 1/13 of the
common lot into conjugal property. It is a basic principle in coownership that no individual co-owner can claim title to any
definite portion of the land or thing owned in common until the
partition thereof. Prior to that time, all that the co-owner has
is an ideal or abstract proportionate share in the entire thing
owned in common by all the co-owners.
This principle is emphasized by the rulings of the Court.
In Lopez v. Ilustre, 5 Phil. 561, it was held that while a coowner has the right to freely sell and dispose of his undivided
359
Art. 494
CIVIL CODE OF THE PHILIPPINES
interest, he has no right to sell a divided part, by metes and
bounds, of the real estate owned in common. The doctrine was
reiterated in Mercado v. Liwanag, L-14429, June 20, 1962
holding that a co-owner may not convey a physical portion of
the land owned in common. And in Santos v. Buenconsejo, L20136, June 23, 1965, it was ruled that a co-owner may not
even adjudicate to himself any determinate portion of the land
owned in common. Since the share of the wife was at no time
physically determined, it cannot be validly claimed that the
house constructed by her husband was built on land belonging
to her, and Art. 158 of the Civil Code cannot apply. Necessarily,
the claim of conversion of the wife’s share from paraphernal
to conjugal character as a result of the construction must be
rejected for lack of factual or legal basis. Moreover, there is no
proof on record that the house occupied only 1/13 of the total
area.
Paulmitan v. CA
215 SCRA 866
(1992)
Since a co-owner is entitled to sell his undivided share, a
sale of the entire property by one co-owner without the consent
of the other co-owners is not null and void.
Even if a co-owner sells the whole property as his, the sale
will affect only his share but not those of the other co-owners
who did not consent to the sale.
Art. 494. No co-owner shall be obliged to remain in the
co-ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing undivided
for a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period
which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited
by law.
360
CIVIL CODE OF THE PHILIPPINES
Art. 494
No prescription shall run in favor of a co-owner or coheir against his co-owners or co-heirs so long as he expressly
or impliedly recognizes the co-ownership.
COMMENT:
(1) Reason for Allowing Partition, as a Rule, at Any Time
To remain in a co-ownership would be to subject a person
to the desires of the rest. Conflicts in management being bound
to arise, the law as much as possible discourages co-ownership. Hence, no co-owner is, as a rule, obliged to remain in the
co-ownership. (Art. 494, first sentence). Moreover, the right to
demand partition never prescribes (as long, of course, as the
co-ownership still remains). (See De Castro v. Echarri, 20 Phil.
23). Moreover, the law itself says: “Each co-owner (as a rule)
may demand at any time the partition of the thing owned in
common, insofar as his share is concerned.” (Art. 494, 2nd
sentence, 1st paragraph). Thus, it has been truly said that
generally a co-owner may not acquire exclusive ownership of
common property thru prescription, and that a co-owner is a
trustee for the other co-owners. (Castillo v. Court of Appeals,
L-18046, Mar. 31, 1964).
David v. Bandin
GR 48322, Apr. 8, 1987
Art. 494 of the Civil Code provides that prescription does
not run against a co-owner “so long as he expressly or impliedly
recognizes the co-ownership.” By the same token, laches or estoppel cannot be invoked against a co-owner who has not been
sleeping on his rights as long as the co-ownership continues to
be recognized by the other co-owners.
(2) Object of a Partition
Both real and personal properties may be the object of
partition. (Del Val v. Del Val, 29 Phil. 534). Partition has for
its purpose the separation, division, or assignment of things
held in common, among the people to whom they may belong.
(See Art. 1079). Of course, the thing itself may be physically
361
Art. 494
CIVIL CODE OF THE PHILIPPINES
divided, or if not, its value may be partitioned. (See 7 Manresa
585; Art. 1079).
(3) When a Co-owner May Not Successfully Demand a Partition (BAR)
(a)
If by agreement (for a period not exceeding 10 years),
partition is prohibited.
[NOTE: The term may be extended by a new agreement, but only after the expiration of the original period,
otherwise the intention of the law would be defeated.].
(b)
When partition is prohibited by a donor or testator (for
a period not exceeding twenty years) — from whom the
property came.
(c)
When partition is prohibited by law (as in the case of
the conjugal partnership property, except in certain instances).
(d)
When a physical partition would render the property unserviceable, but in this case, the property may be allotted
to one of the co-owners, who shall indemnify the others, or
it will be sold, and the proceeds distributed. (Art. 498).
(e)
When the legal nature of the common property does not
allow partition (like in the case of party walls).
(4) Prohibition to Partition Because of an Agreement
(a)
The period must not extend more than 10 years. (Art.
494).
(b)
If it exceeds 10 years, the stipulation is valid only insofar
as the first 10 years are concerned.
(c)
There can be an extension but only after the original period
has expired.
(d)
After the first extension, there can be another, and so on
indefinitely, as long as for each extension, the period of
10 years is not exceeded. (See 3 Manresa 511-513).
(e)
Query: A, B, and C agreed that there should be no parti362
CIVIL CODE OF THE PHILIPPINES
Art. 494
tion till A passes the bar. At the end of 10 years, A has
not yet passed. Is the co-ownership already ended?
ANS.: It is submitted that it should be considered
ended, otherwise the law would be indirectly violated.
(f)
In the same problem, suppose A passed at the end of three
years, should the co-ownership already be considered
ended?
ANS.: Yes, since the resolutory condition has arrived.
(g)
A perpetual prohibition should be considered void as
against public policy, but in such a case, it is believed that
it should be considered valid, for the first ten years.
Tuason v. Tuason
L-3404, Apr. 2, 1951
FACTS: A, B, and C were co-owners of a parcel of
land. They agreed to subdivide it into small lots, and then
divide the proceeds accordingly. Later, A questioned the
validity of the stipulation on the ground that it virtually
compelled them to remain in the co-ownership till after
all the parcels had been sold.
HELD: The stipulation is valid, for the precise purpose of the agreement was to eventually put an end to the
co-ownership, after the parcels had been sold. Their being
forced to remain, till after the sale, should be considered
only as a means to an end — a partnership so to speak,
in order to dispose of the lots.
(h)
Notwithstanding any agreement to partition for ten years,
the parties may mutually rescind the agreement, provided
everybody consents.
(5) Rules in the Case of Succession or Inheritance
(a)
In the law of succession, a testator may provide in his will
that the property he is disposing of will not be partitioned
for 20 years. The legitime may even be subject to this
condition.
363
Art. 494
CIVIL CODE OF THE PHILIPPINES
(b)
In one case, testator prohibited his heirs from making the
partition for a period of twenty years. Long before the expiration of the period, ALL the heirs mutually partitioned
the property among themselves. Shortly thereafter one
of them questioned the validity of the partition, claiming
that it was contrary to the express desires of the deceased.
The Supreme Court held that in view of his previous assent to the partition, he is now prevented by estoppel from
alleging its illegality.
(c)
Although a testator may provide for an indivision of 20
years, the heirs may nevertheless partition the property
should any of the grounds for the dissolution of a partnership exist.
Oliveras, et al. v. Lopez, et al.
L-29727, Dec. 14, 1988
This case exemplifies the Filipino custom of keeping
inherited property in a prolonged judicial condition of coownership.
In a long line of decisions, however, this Court has
held that before the partition of a land or thing held in
common, no individual co-owner can claim title to any
definite portion thereof. All that the co-owner has is an
ideal or abstract quota or proportionate share in the entire
land or thing. The duration of the juridical condition of
co-ownership is not limitless. Under Arts. 494 and 1083 of
the Civil Code, co-ownership of an estate should not exceed
the period of 20 years. And, under the former article, any
agreement to keep a thing or property undivided should
be for a 10-year period only. Where the parties stipulate a
definite period of indivision which exceeds the maximum
allowed by law, said stipulation shall be void only as to the
period beyond such maximum.
Although the Civil Code is silent as to the effect of
the indivision of a property for more than 20 years, it
would be contrary to public policy to sanction co-ownership beyond the period set up by the law. Otherwise, the
20-year limitation expressly mandated by the Civil Code
would be rendered meaningless.
364
CIVIL CODE OF THE PHILIPPINES
Art. 494
(6) Prescription in Favor of a Co-owner Against the Other
Co-owners (BAR)
(a)
As a general rule, one co-owner cannot acquire the whole
property as against the other co-owners. This is why the
others can demand, as a rule, partition at any time. But
this is only true, so long as the co-owner concerned expressly or impliedly recognizes the co-ownership. (Coronel
v. CA, 205 SCRA 393 [1992]).
(b)
If, however, certain requirements are complied with, a
co-owner can become the exclusive owner of the others’
shares by prescription. (Casañas v. Rosello, 50 Phil. 97;
Abella v. Abella, 40 O.G. 4th Supp. No. 8, 222; Cordova,
et al. v. Cordova, et al., L-9936, Jan. 14, 1958).
(c)
These conditions are:
1)
He must make known to the other co-owners that he
is definitely repudiating the co-ownership and that
he is claiming complete ownership over the entire
property.
2)
The evidence of repudiation and knowledge on the
part of the others must be clear and convincing.
3)
The other requirements of prescription — continuous, open, peaceful, public, adverse possession for
the period of time required under the law must be
present. (See Santos v. Heirs of Crisostomo, 41 Phil.
342; see also Bargayo v. Camunot, 40 Phil. 857).
4)
The period of prescription (Statute of Limitations)
shall start to run only from such repudiation of coownership. (Castillo v. Court of Appeals, L-18046,
Mar. 31, 1964).
However, in Cordova, et al. v. Cordova, et al., L9936, Jan. 14, 1958, the Court in an obiter made the
statement that in a constructive trust (as in the case
of co-heirship where one heir or co-owner fraudulently deprives the rest of their shares), prescription
does not run. This doctrine of imprescriptibility of a
constructive trust was reiterated in Juan v. Zuñiga,
365
Art. 494
CIVIL CODE OF THE PHILIPPINES
L-17044, Apr. 28, 1962 and in Jacinto v. Jacinto,
L-17955, L-17957, May 31, 1962 but is directly AT
VARIANCE with the rule stated in J.M. Tuason
and Co. v. Magdangal, L-15539, Jan. 30, 1962, and
in the case of Cornelio Alzona, et al. v. Gregoria
Capunitan, et al., L-10228, Feb. 28, 1962. It would
seem that the BETTER RULE is that a constructive
or implied trust can PRESCRIBE, as distinguished
from an express trust which cannot prescribe (as long
as in this latter case, the relationship between trustor and trustee is recognized).
Valdez v. Olorga
L-22571, May 25, 1973
ISSUE: Generally, does prescription run against a co-heir
or a co-owner?
HELD: No. Generally, prescription does not adversely
affect a co-owner or a co-heir.
[NOTE: However, under certain conditions, the co-ownership or the co-heirship may be repudiated; from this moment
of repudiation, prescription begins to run.].
BAR
A, co-owner of property with B, succeeds in acquiring a Torrens Title in his own name to the property. Five
years after B learned of A’s action, B filed an action for
partition of the property. May A plead prescription of B’s
cause of action? Explain your answer.
ANS.: Generally, we may say that A cannot plead
prescription. Firstly, this is an instance of co-ownership,
and the rule is clear that here, the right to demand partition ordinarily does not prescribe; hence, Art. 494 of the
Civil Code states that “each co-owner may demand at any
time the partition of the thing owned in common, insofar
as his share is concerned.” Secondly, assuming that an
implied trust has been created, still such a trust cannot
366
CIVIL CODE OF THE PHILIPPINES
Art. 494
prescribe, if we follow the ruling in Cordova, et al. v. Cordova, et al., L-9936, Jan. 14, 1958 and Juan v. Zuniga,
L-17955, L-17957, May 31, 1962. Thirdly, assuming that
an implied trust can prescribe (the better rule it seems)
as ruled in Cornelio Alzona, et al. v. Gregoria Capunitan,
et al., L-10228, Feb. 28, 1962, L-17044, Apr. 28, 1962 and
Jacinto v. Jacinto, and other cases, still the period in the
instant problem is only five (5) years, hence negativing
prescription.
Mariano, et al. v. Judge de Vega
GR 59974, Mar. 9, 1987
No prescription runs in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership. A co-owner cannot
acquire the rights of his co-owners by prescription if he
does not clearly repudiate the co-ownership and duly communicate such repudiation to his co-owners. The record in
the Office of the Assessor is not the sufficient repudiation
and communication contemplated by law. Neither may a
co-owner’s possession of the premises militate against his
co-owner’s claim. After all, co-owners are entitled to be in
possession of the premises.
[NOTE: Mere receiving of rents or profits, payment
of land taxes, and the construction of fences and buildings will not be considered sufficient proof of exclusive or
adverse possession because a co-owner as such usually
does these. There must indeed be a definite repudiation.
Laguna v. Levantino, 40 O.G. (14th S 136).].
Mariategui v. CA
205 SCRA 337
(1992)
Prescription of an action for partition does not lie
except when the co-ownership is properly repudiated by
the co-owner. Thus, petitioner’s registration of the properties in their names in 1971 did not operate as a valid
repudiation of the co-ownership.
367
Arts. 495-496
CIVIL CODE OF THE PHILIPPINES
Salvador v. CA
60 SCAD 303
(1995)
Each co-owner may demand at any time the partition of the common property implying that an action to
demand partition is imprescriptible or cannot be barred
by laches.
(d)
Acts which may be considered adverse insofar as strangers
are concerned, may not be considered adverse insofar as
co-owners are concerned. In other words, it is harder for
a co-owner to acquire by prescription the share of the others than to acquire properties of strangers. (See Mangyao
v. Ilan, 38 O.G. 62). Thus, mere actual possession by one
will not give rise to the inference that the possession was
adverse. This is because a co-owner is after all entitled to
possession of the property. (See Art. 486).
Art. 495. Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division
of the thing owned in common, when to do so would render
it unserviceable for the use for which it is intended. But the
co-ownership may be terminated in accordance with Article
498.
COMMENT:
Partition of an Essentially Indivisible Object
(a)
A good example of this article would be the partition of
an automobile owned in common.
(b)
If to physically partition is not practicable, the co-ownership may end under Art. 498.
Art. 496. Partition may be made by agreement between
the parties or by judicial proceedings. Partition shall be governed by the Rules of Court insofar as they are consistent
with this Code.
368
CIVIL CODE OF THE PHILIPPINES
Art. 496
COMMENT:
(1) Classification of the Various Kinds of Partition
(a)
(b)
(c)
(d)
From the viewpoint of cause:
1)
extrajudicial (or conventional)
2)
judicial (when court approval is sought or when
partition is made by the court)
From the viewpoint of permanence:
1)
provisional or temporary
2)
permanent
From the viewpoint of subject matter:
1)
partition of real property
2)
partition of personal property
From the viewpoint of forms and solemnities:
1)
2)
3)
4)
5)
partition in a judicial decree
partition duly registered in the Registry of Property
partition in a public instrument
partition in a private instrument
oral partition
(2) The Law that Governs Partition
(a)
First, the Civil Code.
(b)
Then, suppletorily, the Rules of Court. (Rule 69 of the
Rules of Court provides for the “Partition”).
Sanchez v. CA
87 SCAD 463
(1997)
For a partition to be valid, Rule 74, Sec. 1 of the
Rules of Court requires the concurrence of the following
conditions:
1.
the decedent left no will;
369
Art. 496
CIVIL CODE OF THE PHILIPPINES
2.
the decedent left no debts, or if there were debts
left — all had been paid;
3.
the heirs and liquidators are all of age, or if
they are minors, the latter are represented by
their judicial guardian or legal representatives;
and
4.
the partition was made by means of a public instrument or affidavit duly filed with the Register
of Deeds.
[NOTE: The co-owners have the right to voluntarily terminate their existing co-ownership over the property thru an
agreement subdividing the land among themselves. This right
exists, even if their subdivision does not conform to the rules of
the National Planning Commission as to the area of each lot,
frontage, and width of alleys.
Reasons:
(a)
Said Rules are intended to regulate the subdivision of land
for sale and for building development (not for a voluntary
partitioning, or introduction of improvements by co-owners).
(b)
Secondly, even if the Rules of the Commission would ordinarily be applicable, still said Rules were promulgated
under Executive Order 98 in 1946 (under the emergency
powers of the President), and should therefore not prevail
over the Civil Code which took effect later, that is, Aug.
30, 1950. (Francisco, et al. v. National Urban Planning
Commission, L-8465, Feb. 28, 1957).].
(3) What a Person Desiring Judicial Partition of Real Estate
Must Do
A person having the right to compel the partition of real
estate should set forth in his complaint the NATURE and EXTENT of his TITLE; and an adequate DESCRIPTION of the real
estate. He must join as DEFENDANTS all the other persons
interested in the property. (Sec. 1, Rule 69, Rules of Court).
(a)
Unless all other co-owners and interested persons are
370
CIVIL CODE OF THE PHILIPPINES
Art. 496
made defendants, the action will not prosper. (Reyes v.
Cordero, 46 Phil. 658).
(b)
If a co-owner is dead, his administrator or his heirs may
bring the action.
(c)
Insufficiency of description in the complaint may be cured
even during the trial, not afterwards. (Del Val v. Del Val,
29 Phil. 534).
(d)
A and B were co-owners of land. There was a partition but
A happened to be given more than her share. Many years
later, B asked to be given the extra part but A claimed
prescription in her favor. Is A correct?
HELD: Yes. True, there can generally be no prescription among co-owners (while they remain co-owners), but
here, there has already been a partition (and the co-ownership has therefore ceased). B should have claimed the
extra part earlier. (Valentin Ynot v. Matea Initan, [CA]
34 O.G. 3360).
(e)
An action for partition cannot be considered as one for the
partition of the property owned in common even though
it is so entitled and the prayer of the complaint is to this
effect, if any party to the suit denies the pro-indiviso (undivided) character of the estate whose partition is sought
and claims exclusive title thereto or to any part thereof.
In such case, the action becomes one for the recovery
of property insofar as the property claimed exclusively
by any of the parties is concerned. (Africa v. Africa, 42
Phil. 934; Hilario v. Dilla, et al., CA-GR 5266, Feb. 28,
1951). Indeed, it is imperative for the court to determine
ownership before a proper adjudication of the partitioned
property can be made. (Brownell v. Bautista, 50 O.G. No.
10, p. 4772).
(4) What Court Must Do If It Finds that the Plaintiff Has
the Right to Demand Partition
If after the trial the court finds that the plaintiff has the
right thereto, it shall order the partition of the real estate
among all the parties in interest. Thereupon, the parties may,
if they are able to agree, make the partition among themselves
371
Art. 496
CIVIL CODE OF THE PHILIPPINES
by proper instruments of conveyance, and the court shall confirm the partition so agreed upon by all the parties, and such
partition, together with the order of the court confirming the
same, shall be recorded in the registry of deeds of the place
in which the property is situated. (Sec. 2, Rule 69, Rules of
Court). A final order decreeing partition and accounting may
be appealed by any party aggrieved thereby. (Ibid.).
(a)
While a partition effected thru a public instrument would
be desirable, still the law does not require expressly the
constitution of said public instrument. If there can be an
alienation (or sale) of the real rights in real properties
by virtue of a private instrument or even orally (provided
there has been full or partial execution or there is no objection), it is evident that with greater reason should oral
partition or partition by virtue of a private instrument (of
real estate) be allowed, considering that here there is no
change of ownership, but a mere designation and segregation of the part that rightfully belongs to each co-owner.
(See Hernandez v. Andal, et al., 44 O.G. 8, p. 2681; see
also Art. 1079, Civil Code).
(b)
Incidentally, it should be noted that while a private document of sale of land is valid and binding between the
parties, it is not sufficient by itself to convey title or any
real right to the land. This is because acts and contracts
which have for their object the creation, transmission,
modification, or extinguishment of real right over immovable property, must appear in a public instrument. (See
Pornellosa, et al. v. Land Tenure Administration, et al.,
L-14040, Jan. 31, 1961).
[NOTE: What the buyer must do would be to compel
the seller to execute the needed public instrument. This is
because the sale is valid and enforceable. (See Art. 357,
Civil Code).].
(5) What Court Must Do If the Parties Fail to Agree on the
Partition
If the parties are unable to agree upon the partition, the
court shall appoint not more than three competent and disin372
CIVIL CODE OF THE PHILIPPINES
Art. 496
terested persons as commissioners to make the partition, commanding them to set off to the plaintiff and to each party in
interest such part and proportion of the property as the court
shall direct. (Sec. 3, Rule 69, Rules of Court).
(a)
A decision directing partition is not final but interlocutory
because it leaves something more to be done in the trial
court for the complete disposition of the case, namely,
the appointment of commissioners, the proceedings to be
had before them, the submission of their report which,
according to law, must be set for hearing. (Tan Vda. de
Zaldarriaga v. Enriquez, et al., L-13252, Apr. 29, 1961).
(b)
The selection of the commissioners depends upon the
court’s discretion, and will not be altered by the appellate
court, unless abuse of discretion is proved. (Tell v. Tell,
48 Phil. 70).
(6) Factors to be Considered in Making the Partition
In making the partition, the commissioners shall view
and examine the real estate, after due notice to the parties
to attend at such view and examination, and shall hear the
parties as to their preference in the portion of the property to
be set apart to them and the comparative value thereof, and
shall set apart the same to the parties in lots or parcels as will
be most advantageous and equitable, having due regard to the
improvements, situation, and quality of the different parts of
the land. (Sec. 4, Rule 69, Rules of Court). Of course, lands
occupied adversely by strangers cannot be examined by said
commissioners. (Araullo v. Araullo, 3 Phil. 567).
(7) Rule if a Physical Partition is Prejudicial
If to make a physical partition is prejudicial, the land will
be given to one co-owner who should reimburse the rest, unless one asks that a public sale be made. (See Sec. 5, Rule 69,
Rules of Court). The request for a sale is allowed to forestall
collusion between the assignee and the commissioners regarding the land’s value.
373
Art. 496
CIVIL CODE OF THE PHILIPPINES
(8) Effectivity of the Partition Made by the Commissioners
The partition made by the commissioners will not be effective until approved by the Court. (See Sec. 6, Rule 69, Rules
of Court). The court is allowed, of course, to approve, amend,
or disapprove the report. New commissioners may even be appointed. (See Sec. 7, Rule 69, Rules of Court).
(9) Rule as to Who Pays the Costs
The parties shall pay the costs, including the compensation of the commissioners. (See Sec. 10, Rule 69, Rules of
Court).
(10) Statement of the Proper Boundaries
If actual partition is made, the judgment shall state the
proper boundaries. (See Sec. 11, Rule 69, Rules of Court).
(11) Necessity of Delivery
Delivery is a necessary and indispensable incident to carry
into effect the purpose of partition. Therefore, each co-owner
may be placed in possession of the lot adjudicated to him even
if the court’s decision on the partition be silent in this respect.
(Confessor, et al. v. Pelayo, et al., L-14352, Mar. 27, 1961).
(12) Conversion of Partition Proceeding to One for the Settlement of an Estate
An ordinary action for partition cannot be converted into a
proceeding for the settlement of the estate of a deceased person,
without compliance with the procedure outlined in the Rules
of Court (Rules 78-89), especially the provisions on publication
and notice to creditors. (Guico, et al. v. Bautista, et al., L-14921,
Dec. 31, 1960).
(13) Rule in Partition Sales
In partition sales conducted by authority of the court,
if the sale is made by the sheriff for cash, and the bidder to
whom the property was adjudicated fails to make immediate
374
CIVIL CODE OF THE PHILIPPINES
Art. 496
payment, the sheriff may sell the property anew on the same
day without readvertising, even after the hours of sale have
elapsed. Partition sales become valid and binding only upon
confirmation by the court, so that before such confirmation, the
bidder acquires no contractual right thereunder. Hence, if the
property is resold before the confirmation of the first sale, and
the resale is duly confirmed by the court, the original purchaser
is released from further liability upon his purchase, and cannot
be held for the deficiency upon the resale. (Tayengco v. SidecoHautea, L-17385, Nov. 29, 1965).
(14) Effect of an Extrajudicial Partition that is Later On Approved by a Court of Competent Jurisdiction
Here, the partition renders almost conclusive questions of
possession and ownership over the property — such that future
judicial determination will generally be precluded. (See Borja
Vda. de Torres v. Encarnacion, L-4681, July 31, 1951).
(15) Novation of Partition
Lucero v. Banaga
L-34224, Oct. 15, 1974
A partition may be novated as long as all the interested
parties consent thereto. This is particularly so if such novation
is required in the interest of justice and equity, and in order
to facilitate the settlement of the estate.
(16) Effect of Laches
Ramos v. Ramos
L-19872, Dec. 3, 1974
FACTS: Forty (40) years after a partition had been made,
plaintiffs complain that the partition that had been effected
was prejudicial to their rights. Ordinarily, can their complaint
still be successfully heard?
HELD: Ordinarily, they should not complain, in view of
their laches or unexplained delay. After 40 years, it would be
375
Art. 496
CIVIL CODE OF THE PHILIPPINES
very difficult to harness judicial compassion in behalf of their
claim.
Heirs of Joaquin Teves v. CA
114 SCAD 181, 316 SCRA 632
(1999)
An action questioning the extrajudicial settlement instituted after more than 25 years from the assailed conveyance
constitutes laches, which is the negligence or omission to assert
a right within a reasonable time, warranting a presumption
that the party entitled to assert it either has abandoned it or
declined to assert it.
(17) May Validity of a Partition Be Adjudged in a Land Registration Case?
Demetrio Manalo v. Hon. Herminio C.
Mariano, et al.
L-33850, Jan. 22, 1976
FACTS: Demetrio Manalo and his nephew Severino
Manalo executed in 1960 a “Kasulatan ng Hatian Ng Lupa”
(“Partition of Land”) dividing their common land between the
two of them. On Mar. 6, 1968, Demetrio filed in the CFI (now
RTC) of Rizal an application for the registration of the lots assigned to him in the partition, but Severino filed an opposition
alleging that his signature to the “Kasulatan” had been fraudulently obtained by Demetrio. Severino filed a counter-petition
for the registration in his own name of the lots involved. After
hearing, the CFI (now RTC) ruled that the partition agreement
was valid, and ordered the registration in the name of the applicant, Demetrio. When the judgment became final, the Court
in 1971, directed the issuance of the corresponding decree. Now
then, in 1970 (or prior to the termination of the land registration case), the children of Severino (without joining Severino)
sued in the CFI (now RTC) a “petition” for the annulment of
the “Kasulatan.” This case was assigned to another CFI (now
RTC) branch in Rizal. Demetrio filed a Motion to Dismiss, but
the CFI (now RTC) branch denied in 1971 the Motion on the
376
CIVIL CODE OF THE PHILIPPINES
Art. 496
ground that the land registration case did not constitute res
judicata because the land registration court, with its limited
jurisdiction, could not resolve said issue. Demetrio filed the
instant petition in the Supreme Court for certiorari and prohibition. The issue is whether the annulment of the partition
agreement is barred by res judicata; otherwise stated, is the
decision of the land registration court upholding the effectiveness of the “Kasulatan” valid?
HELD: The decision of the land registration court upholding the effectiveness of the “Kasulatan” is VALID, and
therefore the action for annulment of the partition agreement
is barred by res judicata. The decision in the land registration
case, which is a proceeding in rem, is conclusive upon the title
to the land, and is binding on the entire world. In fact, said
decision is even a judgment in personam as against Severino
Manalo, the oppositor therein. The contention of Severino that
the CFI (now RTC), as a land registration court had no jurisdiction to pass upon the partition, is not well taken. The CFI
(now RTC) is a court of general original jurisdiction including
land registration. (De Paula v. Escay, 97 Phil. 617). Whether
a particular matter should be resolved by the CFI (now RTC)
in the exercise of its general or limited jurisdiction is in reality, not a jurisdictional question. It is in essence a procedural
question involving a mode of practice “which may be waived.”
(Cunanan v. Amparo, 80 Phil. 227). Thus, although a probate
court may not decide a question of title yet if the parties submit
that question to the probate court, and the interests of third
parties are not impaired, the probate court may have jurisdiction to decide that issue. (Pascual v. Pascual, 73 Phil. 56). Here,
since the parties agreed to submit the question of validity of
the “Kasulatan,” the land registration court had jurisdiction.
(Franco v. Monte de Piedad, L-17610, Apr. 22, 1963).
(18) Prescriptive Period if Partition is Void
Landayan v. Bacani
L-30455, Sep. 30, 1982
The action to declare the nullity of a VOID extrajudicial
partition does not prescribe. (See also Art. 1409, Civil Code).
377
Art. 497
CIVIL CODE OF THE PHILIPPINES
Art. 497. The creditors or assignees of the co-owners may
take part in the division of the thing owned in common and
object to its being effected without their concurrence. But
they cannot impugn any partition already executed, unless
there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without
prejudice to the right of the debtor or assignor to maintain
its validity.
COMMENT:
(1) Rights of Creditors With Respect to the Partition
Example:
A, B, and C, are the co-owners of a lot. They are indebted
to X for the construction of certain improvements thereon. In
the partition proceeding, X is allowed to participate. If X did
not participate, he is not allowed to impugn a partition already
executed unless —
(a)
X was defrauded;
(b)
or X has previously presented a formal opposition to
prevent it.
However, if the co-owners believe that the partition had
been made validly (without the creditor being prejudiced), they
have the right to prove their contention. (Art. 497).
(2) Scope of ‘Creditors’
All creditors whether preferred or ordinary are included
within the scope of “creditors” as used in this article, but they
must have become creditors during the existence of the coownership, and NOT before or after. (3 Manresa 528-529).
(3) Problem (as to Participation of Assignees)
A, B, and C are co-owners. A sold his share to X. Who is
entitled to participate in the partition, A or X?
ANS.: It depends.
378
CIVIL CODE OF THE PHILIPPINES
Art. 498
(a)
If A had sold his WHOLE share, and has delivered same
(such as when X has been put in possession of the land
in place of A, with the result that X now has a REAL
right over the property), then it is NOT A who should
participate but X. (But in this case, X is participating not
as assignee but in his own right, as CO-OWNER, with B
and C.)
(b)
If A had sold only part of his share, or even if he sold his
entire share, he has not yet delivered same to X (such that
X does not have yet a real right, but only a personal right
against A), then both A and X are allowed to participate
in the partition, together with B and C. A will participate
as co-owner, and X as “assignee,” as the term is used in
this article. (See Lopez v. Martinez, 5 Phil. 567).
(4) Notice to Creditors and Assignees
Since the law grants them the right to participate in the
partition, it is understood that notice must be given them, although the law does not expressly so provide. Of course, it will
be their fault if they do not appear after such notification and
ordinarily, they will not be allowed to impugn the par-tition,
unless of course FRAUD against them has been committed.
(See De Santos v. Bank of the Phil. Islands, 58 Phil. 784).
De Santos v. Bank of the Phil. Islands
58 Phil. 784
FACTS: A and B partitioned their common property between themselves. This was approved by the cadastral court.
C, a creditor of A, was able to prove that he (C) had not been
notified of such proceedings, and is now therefore asking the
Supreme Court for the proper remedy. What should be done?
HELD: The Supreme Court should remand (return) the
case to the cadastral court in order to permit C to file the objections he may deem convenient.
Art. 498. Whenever the thing is essentially indivisible
and the co-owners cannot agree that it be allotted to one of
them who shall indemnify the others, it shall be sold and its
proceeds distributed.
379
Art. 498
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Partition of an Essentially Indivisible Object
(a)
Example of an object essentially indivisible: an automobile.
(b)
The termination of the co-ownership here is made not
physically but by the law; hence, this article refers to
what is called a “legal or juridical dissolution.”
(2) Procedure for the ‘Legal’ Partition
(a)
First, give the whole to one co-owner who will now be
required to indemnify the rest.
(b)
If this is not agreed upon (as when nobody wants to get
it, or more than one desire it), there must be a sale (public sale, such as an auction or a private sale). Of course,
strangers are allowed to purchase. (See 3 Manresa 514515).
[NOTE: The procedure applies whether the property
is real or personal. (See Garcia de Lara v. Gonzales de
Lara, 2 Phil. 294). There is no right of legal redemption
here for the co-ownership has ceased.].
(3) Applicable Also to Objects Essentially Divisible
Although the article seemingly refers only to a case when
the property is essentially indivisible, still there is nothing
wrong with applying same to an object that is essentially divisible (like land). (See Lara v. Lara, 2 Phil. 294). Under Sec.
5, Rule 69, Rules of Court, regarding partition of real estate:
“When it is made to appear to the commissioners that the real
estate, or a portion thereof, cannot be divided without prejudice
to the interests of the parties, the court may order it assigned
to one of the parties willing to take the same, provided he pays
to the other parties such amounts as the commissioners deem
equitable, unless one of the interested parties asks that the
property be sold instead of being so assigned, in which case
the court shall order the commissioners to sell the real estate
at public sale under such conditions and within such time as
the court may determine.’’
380
CIVIL CODE OF THE PHILIPPINES
Art. 499
Ramirez v. Ramirez
L-22621, Sep. 29, 1967
FACTS: A lot, around 1,561 sq.m. in area, of Plaza Santa
Cruz and Escolta in Manila was owned in common by 6 persons,
one of whom desired a physical segregation of his 1/6 share.
The rest objected, on the ground that the lot being commercial,
its value would be greatly impaired should there be a physical
partition.
HELD: The physical segregation of the 1/6 share should
be allowed. It is doubtful if the proportionate value of the
remaining 5/6 (around 1,300 sq. meters) would be decreased,
considering its very favorable commercial position. Hence, the
lot involved should not be considered indivisible.
Art. 499. The partition of a thing owned in common shall
not prejudice third persons, who shall retain the rights of
mortgage, servitude, or any other real rights belonging to
them before the division was made. Personal rights pertaining to third persons against the co-ownership shall also
remain in force, notwithstanding the partition.
COMMENT:
(1) Protection of Third Person’s Rights
(a)
Note that both real and personal rights are protected.
(b)
Example:
A, B, and C were co-owners of a parcel of land mortgaged
to M. If A, B, and C should physically partition the property,
the mortgage in M’s favor still covers all the three lots, which
together, formerly constituted one single parcel. If A alone had
contracted an unsecured obligation, he would of course be the
only one responsible.
(2) Meaning of ‘Third Persons’ in this Article
All those who did not in any way participate or intervene
in the partition are considered “third persons.’’ (3 Manresa 54;
see also Gonzaga v. Martinez, 9 Phil. 489). Thus, also a judg381
Art. 500
CIVIL CODE OF THE PHILIPPINES
ment obtained by one co-owner against another co-owner will
not adversely affect a purchaser of the latter’s portion, if such
purchase had been made PRIOR to the judgment and without
notice of the controversy. (See Vera v. Acoba, L-5973, Mar. 30,
1954).
(3) Interests of All Persons Must Be Considered
When the court is asked to help in a partition, the interests of all must be considered so that reason and justice would
prevail. (Gov’t. v. Abadilla, 53 Phil. 23).
Art. 500. Upon partition, there shall be a mutual accounting for benefits received and reimbursements for expenses
made. Likewise, each co-owner shall pay for damages caused
by reason of his negligence or fraud.
COMMENT:
Effects of Partition
(a)
mutual accounting for benefits received. (Art. 500).
(b)
mutual reimbursement for expenses. (Art. 500).
(c)
indemnity for damages in case of negligence or fraud. (Art.
500).
(d)
reciprocal warranty for
1)
defects of title (or eviction);
2)
quality (or hidden defects). (Art. 501).
[NOTE: No warranty if there is a contrary stipulation or if the eviction is due to fault of co-owner
evicted. (See Arts. 1092-1093).].
(e)
each former co-owner is deemed to have had exclusive
possession of the part allotted to him for the entire period
during which the co-possession lasted. (Art. 543).
[If he buys the shares of the others, this presumption of exclusive possession does not refer to said shares.
(Ramos Silos v. Luisa Ramos, L-7546, June 30, 1955).].
382
CIVIL CODE OF THE PHILIPPINES
(f)
Art. 500
partition confers upon each, the exclusive title over his
respective share. (See Art. 1091).
Del Banco v. IAC
GR 72694, Dec. 1, 1987
Where the co-owners agreed not only in the sharing
in proportion of the benefits derived from the property but
also in the distribution of the property — each co-owner
being allocated 1/4 portion of the property — each of the
co-owners is a co-owner of the whole, and in this sense,
over the whole, he exercises the right of dominion, but he
is at the same time the sole owner of a portion (in this
case, 1/4) of the property which is truly abstract, because
until physical division is effected, such portion is merely
an ideal share, not concretely determined.
A co-owner cannot, without the conformity of the
other co-owners or a judicial decree of partition issued
pursuant to the provision of Rule 69 of the Rules of Court,
adjudicate to himself in fee simple, a determinate portion
of the lot owned in common, as his share therein, to the
exclusion of other co-owners. In the law of co-ownership,
both under the present Civil Code, as in the Code of 1889,
no individual co-owner can claim any definite portion
thereof. It is therefore of no moment that some of the
co-owners have succeeded in securing cadastral titles in
their names to some portions of the property occupied by
them.
It is not enough that the co-owners agree to subdivide
the property. They must have a subdivision plan drawn
in accordance with which they take actual and exclusive
possession of their respective portions in the plan and
titles issued to each of them accordingly. The mechanics
of actual partition should follow the procedure laid down
in Rule 69 of the Rules of Court.
Actual possession and enjoyment of some portions of
the property by some of the co-owners cannot be considered repudiation of the co-ownership. Where the property
was purchased by the original co-owners as a common
383
Art. 501
CIVIL CODE OF THE PHILIPPINES
property and it has not been proven that the same had
been partitioned among them or among their heirs, a coowner’s possession of his share is co-possession which is
linked to the possession of the other co-owners.
Art. 501. Every co-owner shall, after partition, be liable
for defects of title and quality of the portion assigned to each
of the other co-owners.
COMMENT:
(1) Reciprocal Warranty
Example: A and B, co-owners, partitioned their land.
Later, C, a stranger was able to prove that he really owned
the lot belonging to B. Should B alone bear the loss?
ANS.: No. Both A and B must bear the loss in that A
must give half of his portion to B because there is a reciprocal
or mutual warranty against eviction.
(2) How Co-ownership Is Extinguished
(a)
judicial partition
(b)
extrajudicial partition
(c)
when by prescription, one co-owner has acquired the whole
property by adverse possession as against all the others,
and repudiating unequivocally the co-ownership of the
other
(d)
when a stranger acquires by prescription the thing owned
in common
(e)
merger in one co-owner
(f)
loss or destruction
(g)
expropriation (here the indemnity will be distributed accordingly).
384
CIVIL CODE OF THE PHILIPPINES
Title IV. — SOME SPECIAL PROPERTIES
Chapter 1
WATERS
Section 1
OWNERSHIP OF WATERS
Art. 502. The following are of public dominion:
(1)
Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and
brooks running in their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on
lands of public dominion;
(4) Lakes and lagoons formed by nature on public
lands, and their beds;
(5) Rain waters running through ravines or sand beds,
which are also of public dominion;
(6)
Subterranean waters on public lands;
(7) Waters found within the zone of operation of public
works, even if constructed by a contractor;
(8) Waters rising continuously or intermittently on
lands belonging to private persons, to the State, to a province, or to a city or a municipality from the moment they
leave such lands;
(9) The waste waters of fountains, sewers and public
establishments.
385
Art. 502
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Nature of Public Waters
Public waters are for the use of the general public (Bautista v. Alarcon, 3 Phil. 631), therefore, if a river runs thru two
municipalities, neither may monopolize its use, or obstruct its
use by another municipality by, for example, the construction
of a dam. The dam can be ordered removed. (Mangaldan v.
Manaoag, 38 Phil. 455).
(2) Rules as to Rivers
A river, whether navigable or not, is of public dominion,
since the law makes no distinction, hence a non-navigable river
cannot be acquired by prescription. (See Com. v. Meneses, 38
O.G. 2839).
(3) Some Doctrines
(a)
A creek is merely an arm of a river, and must, therefore,
be classified as property of public dominion. (See Mercado
v. Mun. Pres. of Macabebe, 59 Phil. 592).
(b)
Because rivers belong to the public, dams and other
constructions thereon cannot be made without proper
authorization. (See Meneses v. Commonwealth, 40 O.G. 7
Supp. 41).
(c)
A “spring’’ is a place thru which water comes up from
the earth by the operation of natural resources, although
originally artificially opened by man. (56 Am. Jur. 612).
(d)
Esteros are of public dominion, and are, therefore, nonregisterable. (Insular Gov’t. v. Naval, [CA] 40 O.G. 11th
Supp. 59). No exclusive right thereto may thus be obtained. (Ortiz Luis v. Insular Gov’t., 19 Phil. 437).
(e)
A “stream’’ located within private land is still property of
public dominion (hence, public water), even if the Torrens Title of the land does not show the existence of said
“stream.’’ (See Taleon v. Sec. of Public Works and Communications, L-24281, May 16, 1967).
386
CIVIL CODE OF THE PHILIPPINES
Art. 503
(4) Case
Republic v. Lat Vda. de Castillo
GR 69002, Jan. 30, 1988
Lots which had always formed part of a lake, washed and
inundated by the waters thereof are not subject to registration,
being outside the commerce of men. Since the lots are of public
domain (Art. 502, par. 4, Civil Code), the registration court does
not have jurisdiction to adjudicate said lots as private property,
hence res judicata does not apply.
Art. 503. The following are of private ownership:
(1) Continuous or intermittent waters rising on lands
of private ownership, while running through the same;
(2) Lakes and lagoons, and their beds, formed by Nature on such lands;
(3)
Subterranean waters found on the same;
(4) Rain waters falling on said lands, as long as they
remain within the boundaries;
(5) The beds of flowing waters, continuous or intermittent, formed by rain water and those of brooks, crossing
lands which are not of public dominion.
In every drain or aqueduct, the water, bed, banks and
floodgates shall be considered as an integral part of the land
or building for which the waters are intended. The owners
of lands, through which or along the boundaries of which
the aqueduct passes, cannot claim ownership over it, or any
right to the use of its bed or banks, unless the claim is based
on titles of ownership specifying the right or ownership
claimed.
COMMENT:
(1) Are There Really Private Waters?
It would seem under Art. 503 that there are private waters,
and yet the Constitution provides that all “water ... belong to
the State.” (Sec. 2, Art. XII, 1987 Constitution). Of course, it
387
Art. 504
CIVIL CODE OF THE PHILIPPINES
must be borne in mind that a law remains constitutional until
declared otherwise by the competent court. It is believed that to
be constitutional, this should apply only to existing water rights
prior to the Constitution. (See Sec. 2, Art. XII, 1987 Constitution;
Memorandum of the Code Commission).
Waters rising on private lands are private waters, until
they go to lands of public dominion, in which case they become
public waters. (Art. 502, No. 8).
Waste waters of private establishments are not public
waters. (Art. 502, No. 9).
Under the new Water Code, there are no private waters.
(2) Creeks
A creek is really property of public dominion, being an arm
or extension of a river. But even granting that it is private, still,
if used by the general public for a long time (1906-1928), it has
ceased to be private, and the alleged owner or claimant has no
right to prevent the public from using the same. (Mercado v.
Mun. Pres. of Macabebe, 59 Phil. 592).
(3) Foreshore Land
Republic v. Imperial, Jr.
103 SCAD 380, 303 SCRA 127
(1999)
Foreshore land is that part of the land which is between
high and low water and left dry by the flux and reflux of the
tides. It is a strip of land that lies between the high and low
water marks and is alternatively wet and dry according to the
flow of the tide.
Section 2
THE USE OF PUBLIC WATERS
Art. 504. The use of public waters is acquired:
(1)
By administrative concession;
(2)
By prescription for ten years.
388
CIVIL CODE OF THE PHILIPPINES
Art. 504
The extent of the rights and obligations of the use shall
be that established, in the first case, by the terms of the concession, and, in the second case, by the manner and form in
which the waters have been used.
COMMENT:
(1) Rules that Govern the Use of Public Waters
(a)
If acquired by administrative concession — the terms of
the concession.
(b)
If acquired by prescription for 10 years — the manner
and form of using the waters (under the old Code, the
period was 20 years). (See also periods under the Irrigation Law).
(2) Governing Law for an Administrative Concession
Secs. 14-17 of the Irrigation Law (Act 2152 as amended
by Act 3523) govern the procedure for obtaining an administrative concession. An application therefore must be made to
the Secretary of Public Works and Communications thru the
Director of Public Works.
(3) Order of Preference in Obtaining a Concession
In obtaining a concession, the order of preference is as
follows:
(a)
The first to appropriate is given a better right to ask for
a concession.
(b)
When the claimants appropriated at the same time, preference is given in accordance with the use intended, in
this order:
1)
domestic use (like drinking, cooking)
2)
agricultural use or power development for agricultural purposes
3)
industrial uses
4)
fishponds
389
Art. 504
CIVIL CODE OF THE PHILIPPINES
5)
mining uses or milling connected with mining
purposes. (See Sec. 3, Act 2152).
[NOTE: As a rule, property of public dominion may
not be acquired by prescription. This article on public
waters gives an exception, insofar as their use is concerned.]
[NOTE: To obtain a concession for water, there must
be a legislative franchise. (See Act 4062).].
(4) Fishery Privileges
The laws that govern the award of fishery privileges in
municipal waters are the provisions of Secs. 67 and 69 of Act
4003, as amended by Commonwealth Acts 115 and 471. The
pertinent provisions in the Revised Adm. Code of 1917 (Secs.
2321, 2323, and 2319) have been thereby modified by Act 4003,
as amended. (Vicente San Buenaventura v. Municipality of San
Jose, et al., L-19309, Jan. 30, 1965).
(5) Case
Honorio Bulao v. CA, et al.
GR 101983, Feb. 1, 1993
FACTS: The case at bar involves water and water rights
and is thus a water dispute. The proper authority to try and decide the case is the National Water Resources Council pursuant
to Article 88 of Presidential Decree 1067 providing as follows:
“The Council shall have original jurisdiction over all disputes
relating to appropriation, utilization, exploitation, development,
control, conservation and protection of waters within the meaning and context of the provision of this Code.”
The petitioner invokes in this connection the cases of
Abe-abe v. Manta (90 SCRA 526) and Tanjay Water District
v. Gabaton (172 SCRA 253). In the first case, the petitioners
sought a judicial confirmation of their prior vested right under
Article 504 of the Civil Code to use the water of Anibungan,
Albay and Tajong Creeks to irrigate their ricelands upstream.
They also wanted to enjoin the private respondent from using
390
CIVIL CODE OF THE PHILIPPINES
Art. 504
the water of the creeks at night to irrigate his riceland located
downstream. In the second case, the court was asked to prevent the Municipality of Pamplona from interfering with the
management of the Tanjay Waterworks System. It was held
in both cases that jurisdiction pertained to the National Water
Resources Council as the issues involved were the appropriation, utilization and control of water.
HELD: These cases have no application to the instant
controversy. It is clear from a reading of the private respondent’s complaint in Civil Case 70 that it is an action for damages
predicated on a quasi-delict. A quasi-delict has the following
elements: a) the damage suffered by the plaintiff; b) the act
or omission of the defendant supposedly constituting fault or
negligence; and c) the causal connection between the act and
the damage sustained by the plaintiff.
All these elements are set out in the private respondent’s
complaint, specifically in paragraphs 5, 7 and 8 thereof. The
damage claimed to have been sustained by private respondent
consists of his loss of harvest and consequent loss of income.
The act constituting the fault is the alleged malicious construction of a dam and diversion of the flow of water by the
petitioner. The said acts allegedly caused the interruption of
water passing through petitioner’s land towards respondent’s
lands, resulting in the destruction of the respondent’s rice
plants. The averments of the complaint plainly make out a case
of quasi-delict that may be the basis of an action for damage.
The Court also notes that the title of the complaint is “Civil
Case 70 — Damages.’’ Although not necessarily determinative
of the nature of the action, it would nevertheless indicate that
what the private respondent contemplated was an action for
damages. It is pointed out, however, that paragraph (a) of the
prayer for relief seems to convey the impression that the private
respondent is asking for the right to use the irrigation water
and for the recognition by the petitioner of an easement on his
land. Would this change the character of Civil Case 70?
We have consistently held that the allegations of facts
set forth in the complaint and not the prayer for relief will
determine the nature of an action. In any case, the injury has
been done and that is what the private respondent was suing
391
Arts. 505-506
CIVIL CODE OF THE PHILIPPINES
about in his action for damages. The relief he prayed for did
not change Civil Case No. 70 into a water dispute coming under the jurisdiction of the National Water Research Council.
It follows that since the court a quo had jurisdiction over the
action instituted by the private respondent, its decision, which
has already become final and executory, can no longer be disturbed.
Art. 505. Every concession for the use of waters is understood to be without prejudice to third persons.
COMMENT:
The Concession Should Not Prejudice Third Persons
(a)
The terms of the concession should not jeopardize vested
rights. (Sideco v. Sarena, 41 Phil. 80; Art. 505).
(b)
Example:
A person given a concession should not build a dam
that would divert the flow of the waters and cause damage to others. The injured party has the right to ask for
the removal of the dam. This is true, even if the injury is
only expected and not yet actual. (Eusebio v. Aguas, 47
Phil. 567).
Art. 506. The right to make use of public waters is extinguished by the lapse of the concession and by non-user
for five years.
COMMENT:
(1) Extinguishment of the Right to Make Use of Public Waters
(a)
It would seem that even if there be a concession, non-user
for five years would extinguish the right to make use
of public waters. Of course, the lapse of the concession
is also another way to end the use of the public waters
involved.
392
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 507
Non-user applies also when the use was first acquired by
prescription.
(2) Meaning of Non-User
Non-user is total or partial abandonment. Partial abandonment results in a lawful use only of that part not yet
abandoned. (See 56 Am. Jur. 761). Fortuitous events excuse
non-users. (Op. Atty. Gen. Mar. 9, 1922).
(3) Reversion of the Waters
Non-user reverts the waters to publici juris. (See Sec. 36,
Act 2152).
Section 3
THE USE OF WATERS OF PRIVATE OWNERSHIP
Art. 507. The owner of a piece of land on which a spring
or brook rises, be it continuous or intermittent, may use its
waters while they run through the same, but after the waters
leave the land they shall become public, and their use shall
be governed by the Special Law of Waters of August 3, 1866,
and by the Irrigation Law.
COMMENT:
(1) Conversion of Waters When They Leave Private Lands
Example:
On the land of A, waters rise. Said waters may be used by
A, but after they leave the land, said waters belong to the public
(Art. 507) unless they enter a private estate instead, in which
case, said estate will have their use until they finally leave said
private estate. (Sansano v. Castro, 40 O.G. 15, p. 227).
(2) Riparian Ownership
Riparian rights flow out of riparian ownership (56 Am.
Jur. 727). To be riparian, land must have actual contact with
the water, not be merely proximate to it. (56 Am. Jur. 731).
393
Arts. 508-510
CIVIL CODE OF THE PHILIPPINES
(3) Riparian Rights
(a)
right to the natural flow of the waters
(b)
right of access to and use of the waters
(c)
right of accretion. (See 56 Am. Jur. 726).
(4) Governing Laws
(a)
Spanish Law of Waters of Aug. 3, 1866
(b)
Irrigation Law (Act 2152, as amended)
(c)
Civil Code.
Art. 508. The private ownership of the beds of rain waters does not give a right to make works or constructions
which may change their course to the damage of third persons, or whose destruction, by the force of floods, may cause
such damage.
COMMENT:
Prohibition to Construct Injurious Works
The Article explains itself. Note that damage to third
persons is never allowed.
Art. 509. No one may enter private property to search
waters or make use of them without permission from the
owners, except as provided by the Mining Law.
COMMENT:
Private Property Cannot Generally Be Entered
Without Permission
The Article explains itself.
Art. 510. The ownership which the proprietor of a piece
of land has over the waters rising thereon does not prejudice
the rights which the owners of lower estates may have legally
acquired to the use thereof.
394
CIVIL CODE OF THE PHILIPPINES
Arts. 511-512
COMMENT:
(1) Owners of Lower Estates Should Not Be Prejudiced
Example:
There are neighbors: A, a new owner who occupies the
higher estate; and B, who occupies the lower one. Waters rise
on A’s estate. Now, although A is the owner of said waters,
still he cannot divert the course of the waters in such a way
as to prevent B from using said waters in case B had already
previously acquired the right to use the same. Vested rights
are protected by the law. (See Sideco v. Sarenas, 41 Phil. 80).
(2) Pollution of Waters
Pollution of the waters is actionable, unless due to force
majeure. (56 Am. Jur. 826).
Art. 511. Every owner of a piece of land has the right
to construct within his property, reservoirs for rain waters,
provided he causes no damage to the public or to third persons.
COMMENT:
Right to Construct Reservoirs for Rain Waters
The Article explains itself.
Section 4
SUBTERRANEAN WATERS
Art. 512. Only the owner of a piece of land, or another
person with his permission, may make explorations thereon
for subterranean waters, except as provided by the Mining
Law.
Explorations for subterranean waters on lands of public dominion may be made only with the permission of the
administrative authorities.
395
Art. 513
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Explorations for Subterranean Waters
Example:
A wants to make explorations for subterranean waters
beneath the lot of B, and beneath a lot of public dominion. Has
A the right to do so?
ANS.: Regarding B’s lot, A should ask B’s permission
except if he is already allowed to make explorations under
the Mining Law. Regarding the public lot, A should request
permission from the proper administrative authorities.
(2) Classes of Subterranean Waters
There are 2 classes of subterranean waters:
(a)
flowing water — more or less permanent; definite
course.
(b)
percolating water — no definite course or channel,
like rain water seeping thru the soil. (67 C.J. 833).
Art. 513. Waters artificially brought forth in accordance
with the Special Law of Waters of August 3, 1866, belong to
the person who brought them up.
COMMENT:
(1) Waters Artificially Brought Forth
Example: (In accordance with the Special Law of Waters
of Aug. 3, 1866). A artificially brought up certain waters. He
owns said waters, so they are of private dominion. The bringing
up is usually done thru wells. (56 Am. Jur. 616).
(2) Permitting Another to Construct a Well on Your Land
If you allow another to incur expenses by permitting him
to bore a well on your own land, you cannot later on refuse
permission for him to use the well without reimbursing him
therefor, otherwise fraud will be encouraged. As a matter of
fact, you can be considered in estoppel. (See Mirasol v. Mun.
of Tabaco, 43 Phil. 610).
396
CIVIL CODE OF THE PHILIPPINES
Arts. 514-515
(3) Digging Up of Artesian Wells
Artesian wells may be dug provided that public waters are
not diverted from their natural course, otherwise the Government can step in. (See Art. 49, par. 2, Spanish Law of Waters).
No well may be dug within mining property unless indemnity
is given. (Art. 50, pars. 1 and 2, Spanish Law of Waters).
Art. 514. When the owner of waters artificially brought
to the surface abandons them to their natural course, they
shall become of public dominion.
COMMENT:
Effect of Abandoning the Waters to their Natural
Course
The Article explains itself.
Section 5
GENERAL PROVISIONS
Art. 515. The owner of a piece of land on which there
are defensive works to check waters, or on which, due to a
change of their course, it may be necessary to reconstruct
such works, shall be obliged, at his election, either to make
the necessary repairs or construction himself, or to permit
them to be done, without damage to him, by the owners of the
lands which suffer or are clearly exposed to suffer injury.
COMMENT:
(1) The Repair of Dangerous Defensive Works on Another’s
Land
Example:
A, on his lot, constructed a dam to check certain waters.
But the dam is now in great need of repair. May the adjoining
owners demand the repair?
397
Arts. 516-517
CIVIL CODE OF THE PHILIPPINES
ANS.: Yes, because their properties may be damaged. A
can be obliged to either:
(a)
repair the dam himself,
(b)
or let the others repair the dam.
Cost will be borne by those who would be benefited. (Art.
515). No damage must be caused on A’s land.
(2) Alternatives are Exclusive
The alternatives given in Art. 515 are exclusive. So lower
estates cannot invade upper estates and make diversions all
by themselves. (Osmeña v. Camara, 38 O.G. 2773).
Art. 516. The provisions of the preceding article are
applicable to the case in which it may be necessary to clear
a piece of land of matter, whose accumulation or fall may
obstruct the course of the waters, to the damage or peril of
third persons.
COMMENT:
The Clearance of Dangerous Matter
On A’s lot is a large deposit of matter. A’s neighbors feel
that the deposit might fall, and hence, might obstruct the
course of the waters which they need. May the neighbors ask
for the removal of said accumulated matter?
ANS.: Yes, A can be obliged to either:
(a)
clear the land himself,
(b)
or have the land cleared by others. (Art. 516). But the
neighbors cannot take matters into their own hands
and just construct a canal on A’s estate, for their only
recourse is to exercise the option. (Osmeña v. Camara,
38 O.G. p. 2773).
Art. 517. All the owners who participate in the benefits
arising from the works referred to in the two preceding
articles, shall be obliged to contribute to the expenses of
398
CIVIL CODE OF THE PHILIPPINES
Art. 518
construction in proportion to their respective interests.
Those who by their fault may have caused the damage shall
be liable for the expenses.
COMMENT:
Proportional Contributions for the Needed Expenses
The Article explains itself. Note the proportionate contribution.
Art. 518. All matters not expressly determined by the
provisions of this Chapter shall be governed by the special Law of Waters of August 3, 1866, and by the Irrigation
Law.
COMMENT:
(1) Rule in Case of Conflict Between the Civil Code and the
Special Laws Regarding Waters
Note that in case of conflict, the Civil Code prevails.
(2) Resume of Laws Governing Waters
(a)
Civil Code of the Philippines.
(b)
Spanish Law of Waters of Aug. 3, 1866. (This was extended
to the Philippines on Sep. 24, 1871).
[NOTE: The Spanish Law of Waters of June 13,
1879 was never in force in the Philippines. (See Montano
v. Insular Gov’t., 12 Phil. 572).].
(c)
The Irrigation Act (Act 2152), as amended.
(d)
The Water Power Act. (Act 4062).
(e)
Sec. 2, Art. XII, 1987 Constitution.
(3) Presidential Decree 1067
A DECREE INSTITUTING A WATER CODE,
THEREBY REVISING AND CONSOLIDATING THE
LAWS GOVERNING THE OWNERSHIP, APPROPRIA399
Art. 518
CIVIL CODE OF THE PHILIPPINES
TION, UTILIZATION, EXPLOITATION, DEVELOPMENT,
CONSERVATION AND PROTECTION OF WATER RESOURCES.
WHEREAS, Article XIV, Section 8 of the New Constitution of the Philippines provides, inter alia, that all waters of
the Philippines belong to the State;
WHEREAS, existing water legislations are piecemeal
and inadequate to cope with increasing scarcity of water and
changing patterns of water use;
WHEREAS, there is a need for a Water Code based on
rational concepts of integrated and multi-purpose management
of water resources and sufficiently flexible to adequately meet
future developments;
WHEREAS, water is vital to national development and it
has become increasingly necessary for government to intervene
actively in improving the management of water resources;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me
by the Constitution, do hereby order and decree the enactment
of the Water Code of the Philippines of 1976, as follows:
Chapter I
DECLARATION OF OBJECTIVES
AND PRINCIPLES
Article 1. This Code shall be known as “The Water Code
of the Philippines.’’
Art. 2. The objectives of this Code are:
a.
To establish the basic principles and framework relating to the appropriation, control and conservation of water
resources to achieve the optimum development and rational
utilization of these resources;
b.
To define the extent of the rights and obligations of
water users and owners including the protection and regulation
of such rights;
400
CIVIL CODE OF THE PHILIPPINES
Art. 518
c.
To adopt a basic law governing the ownership, appropriation, utilization, exploitation, development, conservation
and protection of water resources and rights to land related
thereto; and
d.
To identify the administrative agencies which will
enforce this Code.
Art. 3. The underlying principles of this Code are:
a.
All waters belong to the State.
b.
All waters that belong to the State can not be the
subject of acquisitive prescription.
c.
The State may allow the use or development of waters by administrative concession.
d.
The utilization, exploitation, development, conservation and protection of water resources shall be subject to the
control and regulation of the government through the National
Water Resources Council, hereinafter referred to as the Council.
e.
Preference in the use and development of waters
shall consider current usages and be responsive to the changing needs of the country.
Art. 4. Waters, as used in this Code, refers to water under
the ground, water above the ground, water in the atmosphere
and the waters of the sea within the territorial jurisdiction of
the Philippines.
Chapter II
OWNERSHIP OF WATERS
Art. 5. The following belong to the State:
a.
Rivers and their natural beds;
b.
Continuous or intermittent waters of springs and
brooks running in their natural beds and the beds themselves;
c.
Natural lakes and lagoons;
d.
All other categories of surface waters such as water flowing over lands, water from rainfall whether natural
401
Art. 518
CIVIL CODE OF THE PHILIPPINES
or artificial, and water from agricultural runoff, seepage and
drainage;
e.
Atmospheric water;
f.
Subterranean or ground waters; and
g.
Seawater.
Art. 6. The following waters found on private lands also
belong to the State:
a.
lands;
Continuous or intermittent waters rising on such
b.
lands;
Lakes and lagoons naturally occurring on such
c.
Rain water falling on such lands;
d.
Subterranean or ground waters; and
e.
Waters in swamps and marshes.
The owner of the land where the water is found may use
the same for domestic purposes without securing a permit,
provided that such use shall be registered, when required by
the Council. The Council, however, may regulate such use when
there is wastage, or in times of emergency.
Art. 7. Subject to the provisions of this Code, any person
who captures or collects water by means of cisterns, tanks, or
pools shall have exclusive control over such water and the right
to dispose of the same.
Art. 8. Water legally appropriated shall be subject to the
control of the appropriator from the moment it reaches the
appropriator’s canal or aqueduct leading to the place where
the water will be used or stored and, thereafter, so long as
it is being beneficially used for the purposes for which it was
appropriated.
Chapter III
APPROPRIATION OF WATERS
Art. 9. Waters may be appropriated and used in accordance with the provisions of this Code.
402
CIVIL CODE OF THE PHILIPPINES
Art. 518
Appropriation of waters, as used in this Code, is the
acquisition of rights over the use of waters or the taking or
diverting of waters from a natural source in the manner and
for any purpose allowed by law.
Art. 10. Water may be appropriated for the following
purposes:
a.
b.
c.
d.
e.
f.
g.
h.
i.
Domestic;
Municipal;
Irrigation;
Power generation;
Fisheries;
Livestock raising;
Industrial;
Recreational; and
Other purposes.
Use of water for domestic purposes is the utilization of
water for drinking, washing, bathing, cooking or other household needs, home gardens, and watering of lawns or domestic
animals.
Use of water for municipal purposes is the utilization of
water for supplying the water requirements of the community.
Use of water for irrigation is the utilization of water for
producing agricultural crops.
Use of water for power generation is the utilization of
water for producing electrical or mechanical power.
Use of water for fisheries is the utilization of water for the
propagation and culture of fish as a commercial enterprise.
Use of water for livestock raising is the utilization of water for large herds or flocks of animals raised as a commercial
enterprise.
Use of water for industrial purposes is the utilization of
water in factories, industrial plants and mines, including the
use of water as an ingredient of a finished product.
403
Art. 518
CIVIL CODE OF THE PHILIPPINES
Use of water for recreational purposes is the utilization of
water for swimming pools, bath houses, boating, water skiing,
golf courses and other similar facilities in resorts and other
places of recreation.
Art. 11. The State, for reasons of public policy, may declare
waters not previously appropriated, in whole or in part, exempt
from appropriation for any or all purposes and, thereupon, such
waters may not be appropriated for those purposes.
Art. 12. Waters appropriated for a particular purpose
may be applied for another purpose only upon approval of the
Council and on condition that the new use does not unduly
prejudice the rights of other permittees, or require an increase
in the volume of water.
Art. 13. Except as otherwise herein provided, no person,
including government instrumentalities or government-owned
or controlled corporations, shall appropriate water without a
water right, which shall be evidenced by a document known
as a water permit.
Water right is the privilege granted by the government
to appropriate and use water.
Art. 14. Subject to the provisions of this Code concerning
the control, protection, conservation, and regulation of the appropriation and use of waters, any person may appropriate or
use natural bodies of water without securing a water permit
for any of the following:
a.
Appropriation of water by means of handcarried
receptacles; and
b.
Bathing or washing, watering or dipping of domestic
or farm animals, and navigation of watercrafts or transportation of logs and other objects by flotation.
Art. 15. Only citizens of the Philippines, of legal age, as
well as juridical persons, who are duly qualified by law to exploit
and develop water resources, may apply for water permits.
Art. 16. Any person who desires to obtain a water permit
shall file an application with the Council who shall make known
said application to the public for any protests.
404
CIVIL CODE OF THE PHILIPPINES
Art. 518
In determining whether to grant or deny an application,
the Council shall consider the following: protests filed, if any;
prior permits granted; the availability of water; the water supply needed for beneficial use; possible adverse effects; land-use
economics; and other relevant factors.
Upon approval of an application, a water permit shall be
issued and recorded.
Art. 17. The right to the use of water is deemed acquired
as of the date of filing of the application for a water permit in
case of approved permits, or as of the date of actual use in a
case where no permit is required.
Art. 18. All water permits granted shall be subject to
conditions of beneficial use, adequate standards of design and
construction, and such other terms and conditions as may be
imposed by the Council.
Such permits shall specify the maximum amount of water which may be diverted or withdrawn, the maximum rate
of diversion or withdrawal, the time or times during the year
when water may be diverted or withdrawn, the point or points
of diversion or location of wells, the place of use, the purposes
for which water may be used, and such other requirements the
Council deems desirable.
Art. 19. Water rights may be leased or transferred in
whole or in part to another person with prior approval of the
Council, after due notice and hearing.
Art. 20. The measure and limit of appropriation of water
shall be beneficial use.
Beneficial use of water is the utilization of water in the
right amount during the period that the water is needed for
producing the benefits for which the water is appropriated.
Art. 21. Standards of beneficial use shall be prescribed by
the Council for the appropriator of water for different purposes
and conditions, and the use of waters which are appropriated
shall be measured and controlled in accordance therewith.
Excepting those for domestic use, every appropriator of
water shall maintain water control and measuring devices,
405
Art. 518
CIVIL CODE OF THE PHILIPPINES
and keep records of water withdrawal. When required by the
Council, all appropriators of water shall furnish information
on water use.
Art. 22. Between two or more appropriators of water from
the same sources of supply, priority in time of appropriation
shall be given the better right, except that in times of emergency the use of water for domestic and municipal purposes
shall have a better right over all other uses; Provided, That
where water shortage is recurrent and the appropriator for
municipal use has a lower priority in time of appropriation,
then it shall be his duty to find an alternative source of supply
in accordance with conditions prescribed by the Council.
Art. 23. Priorities may be altered on grounds of greater
beneficial use, multi-purpose use, and other similar grounds
after due notice and hearing, subject to payment of compensation in proper cases.
Art. 24. A water right shall be exercised in such a manner
that the rights of third persons or of other appropriators are
not prejudiced thereby.
Art. 25. A holder of a water permit may demand the
establishment of easements necessary for the construction
and maintenance of the works and facilities needed for the
beneficial use of the waters to be appropriated, subject to the
requirements of just compensation and to the following conditions:
a.
That he is the owner, lessee, mortgagee or one having
real right over the land upon which he proposes to use water;
and
b.
That the proposed easement is the most convenient
and the least onerous to the servient estate.
Easements relating to the appropriation and use of waters may be modified by agreement of the contracting parties
provided the same is not contrary to law or prejudicial to third
persons.
Art. 26. Where water shortage is recurrent, the use of the
water pursuant to a permit may, in the interest of equitable
406
CIVIL CODE OF THE PHILIPPINES
Art. 518
distribution of benefits among legal appropriators, be reduced
after due notice and hearing.
Art. 27. Water users shall bear the diminution of any
water supply due to natural causes or force majeure.
Art. 28. Water permits shall continue to be valid as long
as water is beneficially used; however, it may be suspended
on the grounds of non-compliance with approved plans and
specifications or schedules of water distribution; use of water
for a purpose other than that for which it was granted; nonpayment of water charges; wastage; failure to keep records of
water diversion, when required; and violation of any term or
condition of any permit or of rules and regulations promulgated
by the Council.
Temporary permits may be issued for the appropriation
and use of water for short periods under special circumstances.
Art. 29. Water permits may be revoked after due notice
and hearing on grounds of non-use; gross violation of the conditions imposed in the permit; unauthorized sale of water; willful
failure or refusal to comply with rules and regulations or any
lawful order; pollution, public nuisance or acts detrimental to
public health and safety; when the appropriator is found to
be disqualified under the law to exploit and develop natural
resources of the Philippines; when, in the case of irrigation,
the land is converted to non-agricultural purposes; and other
similar grounds.
Art. 30. All water permits are subject to modification or
cancellation by the Council, after due notice and hearing, in
favor of a project of greater beneficial use or for multi-purpose
development, and a water permittee who suffers thereby shall
be duly compensated by the entity or person in whose favor
the cancellation was made.
Chapter IV
UTILIZATION OF WATERS
Art. 31. Preference in the development of water resources
shall consider security of the State, multiple use, beneficial
effects, adverse effects and costs of development.
407
Art. 518
CIVIL CODE OF THE PHILIPPINES
Art. 32. The utilization of subterranean or ground water
shall be coordinated with that of surface waters such as rivers,
streams, springs and lakes, so that a superior right in one is
not adversely affected by an inferior right in the other.
For this purpose, the Council shall promulgate rules and
regulations and declare the existence of control areas for the
coordinated development, protection, and utilization of subterranean or ground water and surface waters.
Control area is an area of land where subterranean
or ground water and surface water are so interrelated that
withdrawal and use in one similarly affects the other. The
boundary of a control area may be altered from time to time,
as circumstances warrant.
Art. 33. Water contained in open canals, aqueducts or
reservoirs of private persons may be used by any person for
domestic purpose or for watering plants as long as the water
is withdrawn by manual methods without checking the stream
or damaging the canal, aqueduct or reservoir; Provided, That
this right may be restricted by the owner should it result in
loss or injury to him.
Art. 34. A water permittee or appropriator may use any
watercourse to convey water to another point in the watercourse for the purpose stated in a permit and such water may
be diverted or recaptured at that point by said permittee in
the same amount less allowance for normal losses in transit.
Art. 35. Works for the storage, diversion, distribution and
utilization of water resources shall contain adequate provision
for the prevention and control of diseases that may be induced
or spread by such works when required by the Council.
Art. 36. When the reuse of waste water is feasible, it shall
be limited as much as possible, to such uses other than direct
human consumption. No person or agency shall distribute such
water for public consumption until it is demonstrated that such
consumption will not adversely affect the health and safety of
the public.
Art. 37. In the construction and operation of hydraulic
works, due consideration shall be given to the preservation of
408
CIVIL CODE OF THE PHILIPPINES
Art. 518
scenic places and historical relics and, in addition to the provisions of existing laws, no works that would require the destruction or removal of such places or relics shall be undertaken
without showing that the destruction or removal is necessary
and unavoidable.
Art. 38. Authority for the construction of dams, bridges
and other structures across of which may interfere with the
flow of navigable or flotable waterways shall first be secured
from the Department of Public Works, Transportation and
Communications.
Art. 39. Except in cases of emergency to save life or property, the construction or repair of the following works shall be
undertaken only after the plans and specifications therefor, as
may be required by the Council, are approved by the proper
government agency; dams for the diversion or storage of water;
structures for the use of water power; installation for the utilization of subterranean or ground water and other structures
for utilization of water resources.
Art. 40. No excavation for the purpose of emission of a hot
spring or for the enlargement of the existing opening thereof
shall be made without prior permit.
Any person or agency who intends to develop a hot spring
for human consumption must first obtain a permit from the
Department of Health.
Art. 41. No person shall develop a stream, lake, or spring
for recreational purposes without first securing a permit from
the Council.
Art. 42. Unless otherwise ordered by the President of
the Philippines and only in times of national calamity or
emergency, no person shall induce or restrain rainfall by any
method such as cloud seeding without a permit from the proper
government agency.
Art. 43. No person shall raise or lower the water level
of a river, stream, lake, lagoon or marsh nor drain the same
without a permit.
Art. 44. Drainage systems shall be so constructed that
their outlets are rivers, lakes, the sea, natural bodies of water,
409
Art. 518
CIVIL CODE OF THE PHILIPPINES
or such other water course as may be approved by the proper
government agency.
Art. 45. When a drainage channel is constructed by a
number of persons for their common benefit, the cost of construction and maintenance of the channel shall be borne by
each in proportion to the benefits derived.
Art. 46. When artificial means are employed to drain
water from higher to lower land, the owner of the higher land
shall select the routes and methods of drainage that will cause
the minimum damage to the lower lands, subject to the requirements of just compensation.
Art. 47. When the use, conveyance or storage of waters
results in damage to another, the person responsible for the
damage shall pay compensation.
Art. 48. When a water resources project interferes with
the access of a landowner to a portion of his property or with
the conveyance of irrigation or drainage water, the person or
agency constructing the project shall bear the cost of construction and maintenance of the bridges, flumes and other structures necessary for maintaining access, irrigation, or drainage,
in addition to paying compensation for land and incidental
damages.
Art. 49. Any person having an easement for an aqueduct
may enter upon the servient land for the purpose of cleaning,
repairing or replacing the aqueduct or the removal of obstructions therefrom.
Art. 50. Lower estates are obliged to receive the waters
which naturally and without the intervention of man flow from
the higher estates, as well as the stone or earth which they
carry with them.
The owner of the lower estate can not construct works
which will impede this natural flow, unless he provides an
alternative method of drainage; neither can the owner of the
higher estate make works which will increase this natural
flow.
Art. 51. The banks of rivers and streams and the shores of
the seas and lakes throughout their entire length and within a
410
CIVIL CODE OF THE PHILIPPINES
Art. 518
zone of three (3) meters in urban areas, twenty (20) meters in
agricultural areas and forty (40) meters in forest areas, along
their margins, are subject to the easement of public use in the
interest of recreation, navigation, flotage, fishing and salvage.
No person shall be allowed to stay in this zone longer than
what is necessary for recreation, navigation, flotage, fishing
or salvage or to build structures of any kind.
Art. 52. The establishment, extent, form, and conditions
of easements of water not expressly determined by the provisions of this Code shall be governed by the provisions of the
Civil Code.
Chapter V
CONTROL OF WATERS
Art. 53. To promote the best interest and the coordinated
protection of flood plain lands, the Secretary of Public Works,
Transportation and Communications may declare flood control
areas and promulgate guidelines for governing flood plain
management plans in these areas.
Art. 54. In declared flood control areas, rules and regulations may be promulgated to prohibit or control activities that
may damage or cause deterioration of lakes and dikes, obstruct
the flow of water, change the natural flow of the river, increase
flood losses or aggravate flood problems.
Art. 55. The government may construct necessary flood
control structures in declared flood control areas, and for this
purpose it shall have a legal easement as wide as may be
needed along and adjacent to the river bank and outside the
bed or channel of the river.
Art. 56. River beds, sand bars and tidal flats may not be
cultivated except upon prior permission from the Secretary of
the Department of Public Works, Transportation and Communication and such permission shall not be granted where
such cultivation obstructs the flow of water or increases flood
levels so as to cause damage to other areas.
Art. 57. Any person may erect levees or revetments to
protect his property from flood, encroachment by the river or
411
Art. 518
CIVIL CODE OF THE PHILIPPINES
change in the course of the river, provided that such construction does not cause damage to the property of another.
Art. 58. When a river or stream suddenly changes its
course to traverse private lands, the owners of the affected
lands may not compel the government to restore the river to its
former bed; nor can they restrain the government from taking
steps to revert the river or stream to its former course. The
owners of the lands thus affected are not entitled to compensation for any damage sustained thereby. However, the former
owners of the new bed shall be the owners of the abandoned
bed in proportion to the area lost by each.
The owners of the affected lands may undertake to return
the river or stream to its old bed at their own expense; Provided, That a permit therefor is secured from the Secretary of
Public Works, Transportation and Communications and works
pertaining thereto are commenced within two years from the
change in the course of the river or stream.
Art. 59. Rivers, lakes and lagoons may, upon the recommendation of the Philippine Coast Guard, be declared navigable
either in whole or in part.
Art. 60. The rafting of logs and other objects on rivers
and lakes which are flotable may be controlled or prohibited
during designated seasons of the year with due regard to the
needs of irrigation and domestic water supply and other uses
of water.
Art. 61. The impounding of water in ponds or reservoirs
may be prohibited by the Council upon consultation with the
Department of Health if it is dangerous to public health, or
it may order that such pond or reservoir be drained if such is
necessary for the protection of public health.
Art. 62. Waters of a stream may be stored in reservoir by a
permittee in such amount as will not prejudice the right of any
permittee downstream. Whoever operates the reservoir shall,
when required, release water for minimum stream flow.
All reservoir operations shall be subject to rules and
regulations issued by the Council or any proper government
agency.
412
CIVIL CODE OF THE PHILIPPINES
Art. 518
Art. 63. The operator of a dam for the storage of water
may be required to employ an engineer possessing qualifications prescribed for the proper operation, maintenance and
administration of the dam.
Art. 64. The Council shall approve the manner, location, depth, and spacing in which borings for subterranean or
ground water may be made, determine the requirements for
the registration of every boring or alteration to existing borings as well as other control measures for the exploitation of
subterranean or ground water resources, and in coordination
with the Professional Regulation Commission, prescribe the
qualifications of those who would drill such borings.
No person shall drill a well without prior permission from
the Council.
Art. 65. Water from one river basin may be transferred
to another river basin only with approval of the Council. In
considering any request for such transfer, the Council shall
take into account the full costs of the tranfer, the benefits that
would accrue to the basin of origin without the transfer, the
benefits that would accrue the receiving basin on account of
the transfer, alternative schemes for supplying water to the
receiving basin, and other relevant factors.
Chapter VI
CONSERVATION AND PROTECTION OF WATERS
AND WATERSHEDS AND RELATED
LAND RESOURCES
Art. 66. After due notice and hearing when warranted by
circumstances, minimum stream flows for rivers and streams
and minimum water levels for lakes may be established by
the Council under such conditions as may be necessary for the
protection of the environment, control of pollution, navigation,
prevention of salt damage, and general public use.
Art. 67. Any watershed or any area of land adjacent to any
surface water or overlying any ground water may be declared
by the Department of Natural Resources as protected area.
Rules and regulations may be promulgated by such Department
413
Art. 518
CIVIL CODE OF THE PHILIPPINES
to prohibit or control such activities by the owners or occupants
thereof within the protected area which may damage or cause
the deterioration of the surface or ground water or interfere
with the investigation, use, control, protection, management
or administration of such waters.
Art. 68. It shall be the duty of any person in control of a
well to prevent the water from flowing on the surface of the
land, or into any surface water, or any porous stratum underneath the surface without being beneficially used.
Art. 69. It shall be the duty of any person in control of a
well containing water with minerals or other substances injurious to man, animals, agriculture, and vegetation to prevent
such waters from flowing on the surface of the land or into any
surface water or into any other aquifer or porous stratum.
Art. 70. No person shall utilize an existing well or pond
or spread waters for recharging subterranean or ground water
supplied without prior permission of the Council.
Art. 71. To promote better water conservation and usage
for irrigation purposes, the merger of irrigation associations
and the appropriation of waters by associations instead of by
individuals shall be encouraged.
No water permit shall be granted to an individual when
his water requirement can be supplied through an irrigation
association.
Art. 72. In the consideration of a proposed water resource
project, due regard shall be given to ecological changes resulting from the construction of the project in order to balance the
needs of development and the protection of the environment.
Art. 73. The conservation of fish and wildlife shall receive
proper consideration and shall be coordinated with other features of water resources development programs to insure that
fish and wildlife values receive equal attention with other
project purposes.
Art. 74. Swamps and marshes which are owned by the
State and which have primary value for waterfowl propagation
or other wildlife purposes may be reserved and protected from
drainage operation and development.
414
CIVIL CODE OF THE PHILIPPINES
Art. 518
Art. 75. No person shall, without prior permission from the
National Pollution Control Commission, build any works that
may produce dangerous or noxious substances or perform any
act which may result in the introduction of sewage, industrial
waste, or any pollutant into any source of water supply.
Water pollution is the impairment of the quality of water
beyond a certain standard. This standard may vary according
to the use of the water and shall be set by the National Pollution and Control Commission.
Art. 76. The establishment of cemeteries and waste disposal
areas that may affect the source of a water supply or a reservoir
for domestic or municipal use shall be subject to the rules and
regulations promulgated by the Department of Health.
Art. 77. Tailings from mining operations and sediments
from placer mining shall not be dumped into rivers and waterways without prior permission from the Council upon recommendation by the National Pollution Control Commission.
Art. 78. The application of agricultural fertilizers and
pesticides may be prohibited or regulated by the National
Pollution Control Commission in areas where such application
may cause pollution of a source of water supply.
Chapter VII
ADMINISTRATION OF WATERS AND
ENFORCEMENT OF THE PROVISIONS
OF THIS CODE
Art. 79. The administration and enforcement of the provisions of this Code, including the granting of permits and the
imposition of penalties for administrative violations hereof,
are hereby vested in the Council, and except in regard to those
functions which under this Code are specifically conferred
upon other agencies of the government, the Council is hereby
empowered to make all decisions and determinations provided
for in this Code.
Art. 80. The Council may deputize any official or agency
of the government to perform any of its specific functions or
activities.
415
Art. 518
CIVIL CODE OF THE PHILIPPINES
Art. 81. The Council shall provide a continuing program
for data collection, research and manpower development needed
for the appropriation, utilization, exploitation, conservation,
and protection of the water resources of the country.
Art. 82. In the implementation of the provisions of this
Code, the Council shall promulgate the necessary rules and
regulations which may provide for penalties consisting of a
fine not exceeding One Thousand Pesos (P1,000.00) and/or
suspension or revocation of the water permit or other right to
the use of water. Violations of such rules and regulations may
be administratively dealt with by the Council.
Such rules and regulations shall take effect fifteen (15)
days after publication in newspapers of general circulation.
Rules and regulations prescribed by any government
agency that pertain to the utilization, exploitation, development, control, conservation, or protection of water resources
shall, if the Council so requires, be subject to its approval.
Art. 83. The Council is hereby authorized to impose and
collect reasonable fees or charges for water resources development from water appropriators, except when it is for purely
domestic purpose.
Art. 84. The Council and other agencies authorized to
enforce this Code are empowered to enter upon private lands,
with previous notice to the owner, for the purpose of conducting surveys and hydrologic investigations, and to perform such
other acts as are necessary in carrying out their functions
including the power to exercise the right of eminent domain.
Art. 85. No program or project involving the appropriation,
utilization, exploitation, development, control, conservation, or
protection of water resources may be undertaken without prior
approval of the Council, except those which the Council may,
in its discretion, exempt.
The Council may require consultation with the public prior
to the implementation of certain water resources development
projects.
Art. 86. When plans and specifications of a hydraulic
structure are submitted for approval, the government agency
416
CIVIL CODE OF THE PHILIPPINES
Art. 518
whose functions embrace the type of project for which the structure is intended, shall review the plans and specifications and
recommend to the Council proper action thereon and the latter
shall approve the same only when they are in conformity with
the requirements of this Code and the rules and regulations
promulgated by the Council. Notwithstanding such approval,
neither the engineer who drew up the plans and specifications
of the hydraulic structure, nor the constructor who built it,
shall be relieved of his liability for damages in case of failure
thereof by reason of defect in plans and specifications, or failure
due to defect in construction, within ten (10) years from the
completion of the structure.
Any action to recover such damages must be brought
within five (5) years following such failure.
Art. 87. The Council or its duly authorized representative, in the exercise of its power to investigate and decide cases
brought to its cognizance, shall have the power to administer
oaths, compel the attendance of witnesses by subpoena and the
production of relevant documents by subpoena duces tecum.
Non-compliance or violation of such orders or subpoena
and subpoena duces tecum shall be punished in the same manner as indirect contempt of an inferior court upon application
by the aggrieved party with the proper Court of First Instance
in accordance with the provisions of Rule 71 of the Rules of
Court.
Art. 88. The Council shall have original jurisdiction over
all disputes relating to appropriation, utilization, exploitation,
development, control, conservation and protection of waters
within the meaning and context of the provisions of this
Code.
The decisions of the Council on water rights controversies
shall be immediately executory and the enforcement thereof
may be suspended only when a bond, in an amount fixed by the
Council to answer for damages occasioned by the suspension or
stay of execution, shall have been filed by the appealing party,
unless the suspension is by virtue of an order of a competent
court.
417
Art. 518
CIVIL CODE OF THE PHILIPPINES
All disputes shall be decided within sixty (60) days after
the parties submit the same for decision or resolution.
The Council shall have the power to issue writs of execution and enforce its decisions with the assistance of local or
national police agencies.
Art. 89. The decisions of the Council on water rights
controversies may be appealed to the Court of First Instance
of the province where the subject matter of the controversy is
situated within fifteen (15) days from the date the party appealing receives a copy of the decision, on any of the following
grounds: (1) grave abuse of discretion; (2) question of law; and
(3) questions of fact and law.
Chapter VIII
PENAL PROVISIONS
Art. 90. The following acts shall be penalized by suspension or revocation of the violator’s water permit or other right
to the use of water and/or a fine of not exceeding One Thousand
Pesos (P1,000.00), in the discretion of the Council:
a.
Appropriation of subterranean or ground water for
domestic use by an overlying landowner without registration
required by the Council.
b.
water.
Non-observance of any standard of beneficial use of
c.
Failure of the appropriator to keep a record of water
withdrawal, when required.
d.
Failure to comply with any of the terms or conditions
in a water permit or a water rights grant.
e.
Unauthorized use of water for a purpose other than
that for which a right or permit was granted.
f.
Construction or repair of any hydraulic work or
structure without duly approved plans and specifications, when
required.
g.
Failure to install a regulating and measuring device
for the control of the volume for water appropriated, when
required.
418
CIVIL CODE OF THE PHILIPPINES
Art. 518
h.
Unauthorized sale, lease, or transfer of water and/or
water rights.
i.
Failure to provide adequate facilities to prevent or
control diseases when required by the Council in the construction of any work for the storage, diversion, distribution and
utilization of water.
j.
Drilling of a well without permission of the Coun-
cil.
k.
Utilization of an existing well or ponding or spreading of water for recharging subterranean or ground water
supplies without permission of the Council.
l.
Violation of or non-compliance with any order, rules,
or regulation of the Council.
m. Illegal taking or diversion of water in an open canal,
aqueduct or reservoir.
n.
Malicious destruction of hydraulic works or structures valued at not exceeding P5,000.00.
Art. 91. A fine of not exceeding Three Thousand Pesos
(P3,000.00) or imprisonment for not more than three (3) years,
or both such fine and imprisonment, in the discretion of the
Court, shall be imposed upon any person who commits any of
the following acts:
1.
Appropriation of water without a water permit,
unless such person is expressly exempted from securing
a permit by the provisions of this Code.
2.
Unauthorized obstruction of an irrigation ca-
nal.
3.
Cultivation of a river bed, sand bar or tidal flat
without permission.
4.
Malicious destruction of hydraulic works or
structure valued at not exceeding Twenty-Five Thousand
Pesos (P25,000.00).
B. A fine exceeding Three Thousand Pesos (P3,000.00)
but not more than Six Thousand Pesos (P6,000.00) or imprisonment exceeding three (3) years but not more than six (6)
419
Art. 518
CIVIL CODE OF THE PHILIPPINES
years, or both such fine and imprisonment in the discretion of
the Court, shall be imposed on any person who commits any
of the following acts:
1.
Distribution for public consumption of water
which adversely affects the health and safety of the public.
2.
Excavation or enlargement of the opening of a
hot spring without permission.
3.
Unauthorized obstruction of a river or waterway, or occupancy of a river bank or seashore without
permission.
4.
Establishment of a cemetery or a waste disposal area near a source of water supply or reservoir for
domestic or municipal use without permission.
5.
Constructing without prior permission of the
government agency concerned, works that produce dangerous or noxious substances, or performing acts that result
in the introduction of sewage, industrial waste, or any
substance that pollutes a source of water supply.
6.
Dumping mine tailings and sediments into rivers or waterways without permission.
7.
Malicious destruction of hydraulic works or
structure valued more than Twenty-Five Thousand Pesos
(P25,000.00) but not exceeding One Hundred Thousand
Pesos (P100,000.00).
C. A fine exceeding Six Thousand Pesos (P6,000.00) but
not more than Ten Thousand Pesos (P10,000.00) or imprisonment exceeding six (6) years but not more than twelve (12)
years, or both such fine and imprisonment, in the discretion
of the Court, shall be imposed upon any person who commits
any of the following acts:
1.
Misrepresentation of citizenship in order to
qualify for water permit.
2.
Malicious destruction of a hydraulic works or
structure, valued at more than One Hundred Thousand
Pesos (P100,000.00).
420
CIVIL CODE OF THE PHILIPPINES
Art. 518
Art. 92. If the offense is committed by a corporation, trust,
firm, partnership, association or any other juridical person, the
penalty shall be imposed upon the President, General Manager,
and other guilty officer or officers of such corporation, trust,
firm, partnership, association or entity, without prejudice to
the filing of a civil action against said juridical person. If the
offender is an alien, he shall be deported after serving his
sentence, without further proceedings.
After final judgment of conviction, the Court upon petition
of the prosecuting attorney in the same proceedings, and after
due hearing, may, when the public interest so requires, order
the suspension of or dissolution of such corporation, trust, firm,
partnership, association or juridical person.
Art. 93. All actions for offenses punishable under Article
91 of this Code shall be brought before the proper court.
Art. 94. Actions for offenses punishable under this Code
by a fine of not more than Three Thousand Pesos (P3,000.00)
or by an imprisonment of not more than three (3) years, or both
such fine and imprisonment, shall prescribe in five (5) years;
those punishable by a fine exceeding Three Thousand Pesos
(P3,000.00) but not more than Six Thousand Pesos (P6,000.00)
or an imprisonment exceeding three (3) years but not more
than six (6) years, or both such fine and imprisonment, shall
prescribe in seven (7) years; and those punishable by a fine exceeding Six Thousand Pesos (P6,000.00) but not more than Ten
Thousand Pesos (P10,000.00) or an imprisonment exceeding
six (6) years but not more than twelve (12) years, or both such
fine and imprisonment, shall prescribe in ten (10) years.
Chapter IX
TRANSITORY AND FINAL PROVISIONS
Art. 95. Within two (2) years from the promulgation of this
Code, all claims for a right to use water existing on or before
December 31, 1974 shall be registered with the Council which
shall confirm said rights in accordance with the provisions of
this Code, and shall set their respective priorities.
When priority in time of appropriation from a certain
source of supply cannot be determined, the order of preference
in the use of the waters shall be as follows:
421
Art. 518
CIVIL CODE OF THE PHILIPPINES
a.
b.
c.
Domestic
Municipal
Irrigation
d.
e.
f.
g.
h.
g.
Power generation
Fisheries
Livestock raising
Industrial
Recreational and
Other purposes.
Any claim not registered within said period shall be considered waived and the use of the water deemed abandoned,
and the water shall thereupon be available for disposition as
unappropriated waters in accordance with the provisions of
this Code.
Art. 96. No vested or acquired right to the use of water
can arise from acts or omissions which are against the law or
which infringe upon the rights of others.
Art. 97. Acts and contracts under the regime of old laws, if
they are valid in accordance therewith, shall be respected, subject to the limitations established in this Code. Any modification
or extension of these acts and contracts after the promulgation
of this Code, shall be subject to the provisions hereof.
Art. 98. Interim rules and regulations promulgated by the
Council shall continue to have binding force and effect, when
not in conflict with the provisions of this Code.
Art. 99. If any provision or part of this Code, or the application thereof to any person or circumstance, is declared
unconstitutional or invalid for any reason, the other provisions
or parts therein shall not be affected.
Art. 100. The following laws, parts and/or provisions of
laws are hereby repealed:
a.
The provisions of the Spanish Law on Waters of
August 3, 1866, the Civil Code of Spain of 1889 and the Civil
Code of the Philippines (RA 386) on ownership of waters, easements relating to waters, use of public waters and acquisitive
422
CIVIL CODE OF THE PHILIPPINES
Art. 518
prescription on the use of waters, which are inconsistent with
the provisions of this Code;
b.
The provisions of RA 6395, otherwise known as the
Revised Charter of the National Power Corporation, particularly Section 3, paragraph (f), and Section 12, insofar as they
relate to the appropriation of waters and the grant thereof;
c.
The provisions of Act 2152, as amended, otherwise
known as the Irrigation Act, Section 3, paragraphs (k) and (m)
of PD 813, RA 2056; Section 90, CA 137; and,
d.
All Decrees, Laws, Acts, parts of Acts, Rules of Court,
executive orders, and administrative regulations which are
contrary to or inconsistent with the provisions of this Code.
Art. 101. This Code shall take effect upon its promulgation.
Done in the City of Manila, this 31st of December, nineteen hundred and seventy-six.
(4) Case
Libertad Santos, et al. v. CA, et al.
GR 61218, Sep. 23, 1992
Article 88 of Presidential Decree 1067 (Water Code)
speaks of limited jurisdiction conferred upon the National
Water Resources Council over all disputes relating to appropriation, utilization, exploitation, development, control, conservation and protection of waters and said jurisdiction of the
council does not extend to, much less cover, conflicting rights
over real properties, jurisdiction over which is vested by law
with the regular courts.
Where the issue involved is not on a settlement of water
rights dispute, but the enjoyment of a right to water use for
which a permit was already granted, the regular court has jurisdiction over the dispute, not the National Water Resources
Council. (Amistoso v. Ong, 130 SCRA 228, 237 [1984]).
423
CIVIL CODE OF THE PHILIPPINES
Chapter 2
MINERALS
Art. 519. Mining claims and rights and other matters
concerning minerals and mineral lands are governed by
special laws.
COMMENT:
(1) Definition of ‘Minerals’
Inorganic elements or substances found in nature whether
in a gaseous, liquid, or solidified stage. Excluded are the soil,
ordinary earth, sand, stone and gravel. (See Sec. 7, Com. Act
No. 137).
(2) Definition of ‘Mineral Lands’
Those where there are minerals sufficient in quality and
quantity to justify expenses for their extraction. (See Sec. 8,
Com. Act No. 137).
(3) Laws Governing Minerals
(a)
Before July 1, 1902: The Spanish Mining Law, entitled
Royal Decree Sobre Mineria (concerning mining) of May
14, 1867. (See Lawrence v. Garduno, GR 1092).
(b)
Between July 1, 1902 — 1935 (Commonwealth):
1)
The Philippine Bill of 1902. (This contained a mining
code, some parts of which were amended by Act of
Congress of Feb. 6, 1905.)
424
CIVIL CODE OF THE PHILIPPINES
2)
(c)
Art. 519
Act 624 of the Phil. Commission (which prescribed
the location and manner of recording mining
claims).
After the Constitution Became Effective
1)
The Phil. Constitution Art. XIII, Sec. 1 of the 1935
Constitution (now Art. XII, Sec. 2, 1987 Constitution), which provides that the mineral resources of
the country shall not be alienated; that all minerals
belong to the state, whether they are contained in
public or private land; and that no license, concession
or lease for the exploitation, and development shall
be granted for a period exceeding 25 years, renewable for another 25 years.
2)
Commonwealth Act 137. (The Mining Law — enacted
Nov. 7, 1936).
3)
Act 2719. (The Coal Act).
4)
Republic Act 387. (The Petroleum Act of 1949).
5)
Act 2932. (Oil and Gas).
6)
The Mining Act of 1995 or RA 7942.
(4) Ownership of Mineral Lands and Minerals Under the
Constitution
Article XII, Sec. 2 of the 1987 Philippine Constitution
reads:
All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception
of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of
natural resources shall be under the full control and supervision of the State. The State may directly undertake such
activities, or it may enter into co-production, joint venture,
or production-sharing agreements with Filipino citizens, or
corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be
425
Art. 519
CIVIL CODE OF THE PHILIPPINES
for a period not exceeding twenty-five years, renewable for
not more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water rights
for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be
the measure and limit of the grant.
The State shall protect the nation’s marine wealth in its
archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization
of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and
fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreignowned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization
of minerals, petroleum, and other mineral oils according to the
general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the
country. In such agreements, the State shall promote the development, and use of local scientific and technical resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
(30) days from its execution.
Cadwallader v. Abeleda
L-31927, June 25, 1980
If a person is involved in a mining dispute, he must first
go to the administrative authorities before seeking a judicial
remedy of any kind.
Mapulo Mining Association v. Lopez
206 SCRA 9
(1992)
Any person who fails to file an adverse claim against the
applicant during the period of publication is forever barred.
426
CIVIL CODE OF THE PHILIPPINES
Art. 519
Atok Big-Wedge Mining Co. v. IAC and
Tuktukan Saingan
74 SCAD 184, GR 63528, Sep. 9, 1996
The process of recording mining claims could not have
been intended to be the operative act of classifying lands into
mineral lands. The recording of a mining claim only operates to
reserve to the registrant, exclusive rights to undertake mining
activities upon the land subject of the claim.
(5) Suppose There Are Minerals on Private Lands?
These minerals are still owned by the State. (See Sections
2 and 4, RA 7942). This is true even if the land has the Torrens
Title. This is because the ownership of mines, from their very
nature, should not depend upon the ownership of the soil.
(6) Salient Features of the Mining Act
In line with Art. XII, Sec. 2 of the 1987 Philippine Constitution, the Philippine Mining Act of 1995 (RA 7942) has been
enacted.
According to its declared policy, it shall be the responsibility of the State to promote and enhance national growth.
Comprising 30 chapters, RA 7942 contains provisions for
government management, mineral agreements, financial or
technical assistance agreement, small scale mining, safety and
environmental protection, settlement of conflicts, organizational
and institutional arrangements, and penal provisions.
427
CIVIL CODE OF THE PHILIPPINES
Chapter 3
TRADEMARKS AND TRADE NAMES
Art. 520. A trademark or trade name duly registered
in the proper government bureau or office is owned by and
pertains to the person, corporation, or firm registering the
same, subject to the provisions of special laws.
COMMENT:
(1) Distinctions Re Trademark, Trade Name and Service
Mark
(a)
Trademark — name or symbol of goods made or manufactured. (Example: McGregor.) (Canon Kabushiki Kaisha
v. CA, GR 120900, July 20, 2000).
(b)
Trade name — name or symbol of store, business, or
occupation. (Example: Heacock’s). It means the name or
designation identifying or distinguishing an enterprise.
(Sec. 121.3, RA 8293). (Canon Kabushiki Kaisha v. CA,
GR 120900, supra).
(c)
Service mark — name or symbol of service rendered.
(Example: Metropolitan Express Company, Inc. [See Sec.
38, Republic Act 1466].).
[NOTE: Under RA 8293, otherwise known as The
Intellectual Property Code, effective Jan. 1, 1998, Part III
Re: The Law on Trademarks, Service Marks, and Trade
Names provides the following definitions: “Mark’’ means
any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall
include a stamped or marked container of goods. (Sec.
428
CIVIL CODE OF THE PHILIPPINES
Art. 520
121.1, RA 8293). “Collective mark’’ means any visible sign
designated as such in the application for registration and
capable of distinguishing the origin or any other common
characteristic, including the quality of goods or services of
different enterprises which use the sign under the control
of the registered owner of the collective mark. (Sec. 121.2,
id.).].
Converse Rubber Corp. v.
Universal Rubber Products, Inc.
GR 27906, Jan. 8, 1987
A trade name is any individual name or surname,
firm name, device or word used by manufacturers, industrialists, merchants and others to identify their businesses, vocations or occupations. As the trade name refers
to the business and its goodwill, the trademark refers to
the goods. The ownership of a trademark or trade name
is a property right which the owner is entitled to protect
since there is damage to him from confusion of reputation or goodwill in the mind of the public as well as from
confusion of goods. The modern trend is to give emphasis
to the unfairness of the acts and to classify and treat the
issue as fraud. Article 8 of the Convention of the Union
of Paris for the Protection of Industrial Property to which
the Philippines became a party on Sep. 27, 1965, provides
that “a trade name [corporate name] shall be protected in
all countries and the Union without the obligation of filing
or registration, whether or not it forms part of the trademark.” The object of the Paris Convention is to accord a
national of a member nation extensive protection “against
infringement and other types of unfair competition.’’
The mandate of the Paris Convention is implemented
in Section 37, Republic Act 166, otherwise known as the
Trademark Law, as follows: “Persons who are nationals
of, domiciled in, or have a bona fide or effective business
or commercial establishment in any foreign country,
which is a party to an international convention of treaty
relating to marks or trade names on the repression of
unfair competition to which the Philippines may be a
429
Art. 520
CIVIL CODE OF THE PHILIPPINES
party, shall be entitled to the provisions of this Act. x x x
Trade names of persons described in the first paragraph
of this section shall be protected without the obligation
of filing or registration whether or not they form parts of
the marks.’’
A corporation is entitled to the cancellation of a mark
that is confusingly similar to a corporate name. Appropriation by another of the dominant part of a corporate name
is an infringement.
Puma Sports Chuh Fabriken Rudolf
Dassler, K.G. v. IAC
GR 75067, Feb. 26, 1988
A treaty or convention is not a mere moral obligation
to be enforced or not at the whims of the incumbent head
of a Ministry. It creates a legally binding obligation on
the parties founded on the generally accepted principle of
international law of pacta sunt servanda which has been
adopted as part of the law of our land.
Article 8 of the Convention of the Union of Property
to which the Philippines became a party on Sep. 27, 1965,
provides that “a trade name [corporation name] shall be
protected in all the countries of the union without the
obligation of filing or registration, whether or not it forms
part of the trademark.’’ The object of the convention is to
accord a national of a member nation extensive protection
“against infringement and other types of unfair competition.’’
The mandate of the Paris Convention is implemented
in Section 37 of RA 166, otherwise known as the Trademark Law which provides that “persons who are nationals
of, domiciled in, or have a bona fide or effective business
or commercial establishment in any foreign country, which
is a party to an international convention or treaty relating to marks or tradenames on the repression of unfair
competition to which the Philippines may be a party, shall
be entitled to the benefits and subject to the provisions’’
of RA 166. Trade names of persons described in the first
paragraph of Section 35 shall be protected without the
430
CIVIL CODE OF THE PHILIPPINES
Art. 520
obligation of filing or registration whether or not they
form part of marks.
A foreign corporation which has never done any
business in the Philippines and which is unlicensed and
unregistered to do business here, but is widely and favorably known in the Philippines through the use therein
of its products bearing its corporate and trade name, has
a legal right to maintain an action in the Philippines to
restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as
the foreign corporation, when it appears that they have
personal knowledge of the existence of such a foreign
corporation, and it is apparent that the purpose of the
proposed domestic corporation is to deal and trade in the
same goods as those of the foreign corporation.
Philips Export B.V. v. CA
206 SCRA 457
(1992)
The general rule as to a corporation is that each
corporation must have a name by which it is to sue and
be sued and do all legal acts. A corporation can no longer
use a corporate name in violation of the rights of others
than an individual can use his name legally acquired so
as to mislead the public and injure another.
In determining the existence of confusing similarity
in corporate name, the TEST is whether the similarity
is such as to mislead a person using ordinary care and
discrimination. It is settled that proof of actual confusion
need not be shown. It suffices that confusion is probably
or likely to occur.
A corporation’s right to use its corporate and trade
name is a property right, a right in rem which it may assert and protect against the world in the same manner as it
may protect its tangible property, real or personal against
trespass or conversion. A corporation has an exclusive right
to the use of its name which may be protected by injunction
upon a principle similar to that upon which persons are
protected in the use of trademarks and tradenames.
431
Art. 520
CIVIL CODE OF THE PHILIPPINES
Amigo Manufacturing, Inc. v.
Cluett Peabody Co., Inc.
GR 139300, Mar. 14, 2001
Findings of the Bureau of Patents that two trademarks are confusingly and deceptively similar to each
other are binding upon the courts, absent any sufficient
evidence to the contrary.
In the present case, the Bureau considered the totality of the similarities between the two sets of marks and
found that they were of such degree, number, and quality
as to give the overall impression that the two products
are confusingly if not deceptively the same.
(2) Necessity of Registration at the Patent Office
(a)
A certificate of registration of a trademark is prima facie
evidence of the validity of such registration, but the same
may be rebutted. (People v. Lim Hoa, L-10612, May 30,
1958).
(b)
Incidentally, the contention that once the publication of
the application is approved by the Director of Patents, it
becomes the latter’s ministerial duty to issue the corresponding certificate of registration is UNTENABLE. It is
the decision of the Director given after the public is given
the opportunity to contest the application that finally
terminates the proceedings, and in which the registration
is finally approved or disapproved. (East Pacific Merchandising Corp. v. Director of Patents, et al., L-14377, Dec.
29, 1960). A trademark that is already registered in the
name of a person is entitled to be protected even if the
registrant has not yet used said trademark. (Chua Che
v. Phil. Patent Office, L-18337, Jan. 30, 1965).
James Boothe v. Director of Patents
L-24919, Jan. 28, 1980
The Director of Patents:
1)
can review the decisions of the Patent Examiner.
432
CIVIL CODE OF THE PHILIPPINES
Art. 520
2)
can consider grounds of which he has knowledge — grounds other than those raised specifically in an appeal to him.
3)
can require a full, definite and accurate description of a process (the patent for which is
applied for) so that the public may be properly
informed (if incomplete, the patent application
can be considered substantially defective).
Lorenzana v. Macagba
GR 33773, Oct. 22, 1987
FACTS: GLL filed an application with the Philippine Patent Office for registration of a trademark in
the Supplemental Register. GLL’s brother SLL, asked
for the cancellation of Certificates of Registration. After
protracted hearings, the Director of Patents held GLL as
entitled to registration of the questioned trademark in the
Supplemental Register. Later, GLL again filed with the
Patent Office for the registration of the same trademark,
this time in the Principal Register. This was opposed by
SLL and 6 of his 11 brothers and sisters. GLL moved to
dismiss the opposition on the ground of res judicata. The
Director dismissed the opposition on the ground of res
judicata.
HELD: There is no res judicata. There is no identity
of parties, subject matter and causes of action between
the registration in the supplemental register and registration in the principal register. For res judicata to apply,
the following requisites must concur: (1) there must be
a prior final judgment or order; (2) the court rendering
the judgment or order must have jurisdiction over the
subject matter and over the parties; (3) the judgment
or order must be on the merits; and (4) there must be
between the two cases, the earlier and the instant, identity of parties, identity of subject matter and identity of
causes of action. Substantial distinctions exist between
registration in the Principal Register and registration
in the Supplemental Register. These distinctions are:
(1) Registration in the Principal Register gives rise to
433
Art. 520
CIVIL CODE OF THE PHILIPPINES
a presumption of the validity of the registration, the
registrant’s ownership of the mark, and his right to the
exclusive use thereof. There is no such presumption in
registration in the Supplemental Register. (2) Registration
in the Principal Register is limited to the actual owner
of the trademark and proceedings therein on the issue
of ownership which may be contested through opposition
or interference proceedings or, after registration, in a
petition for cancellation. Registration in the Principal
Register is constructive notice of the registrant’s claim
of ownership, while registration in the Supplemental
Register is merely proof of actual use of the trademark
and notice that the registrant has used or appropriated
it. It is not subject to opposition although it may be
cancelled after the issuance. Corollarily, registration
in the Principal Register is a basis for an action for
infringement, while registration in the Supplemental
Register is not. (3) In applications for registration in
the Principal Register, publication of the application is
necessary. This is not so in applications for registration
in the Supplemental Register. Certificates of registration
under both Registers are also different from each other.
(4) Proof of registration in the Principal Register may
be filed with the Bureau of Customs to exclude foreign
goods bearing infringing marks while this does not hold
true for registrations in the Supplemental Register.
(3) Duration of the Marks
A certificate of registration shall remain in force for ten
(10) years: Provided, That the registrant shall file a declaration of actual use and evidence to that effect, or shall show
valid reasons based on the existence of obstacles to such use,
as prescribed by the Regulations, within one (1) year from the
fifth anniversary of the date of the registration of the mark.
Otherwise, the mark shall be removed from the Register by
the Intellectual Property Office. (Sec. 145, RA 8293).
(4) Marks or Names That Cannot Be Registered
(a)
Immoral, deceptive, scandalous, or disparaging matter.
(Sec. 123[a], RA 8293).
434
CIVIL CODE OF THE PHILIPPINES
Art. 520
(b)
Those which falsely suggest a connection with persons
(living or dead), institutions, beliefs, or national symbols.
(Ibid.).
(c)
The national flag, coat of arms, or insignia of the Philippines, its political subdivisions or any foreign nation (or
simulation thereof). (Sec. 123[b], id.).
(d)
The name, portrait, or signature of a living individual (unless he consents in writing); or of a deceased Philippine
President (while the widow is alive, unless she gives her
written consent). (Sec. 123[c], id.).
(e)
That which resembles a trademark or trade name as
would cause deceptive confusion. Indeed, registration
must be refused in cases where there is a likelihood of
confusion, mistake, or deception, even though the goods
should fall into different categories. (Chua Che v. Phil.
Patent Office, L-18337, Jan. 30, 1965). (See Sec. 123[d],
RA 8293).
Converse Rubber Corp. v.
Universal Rubber Products, Inc.
GR 27906, Jan. 8, 1987
FACTS: Universal Rubber Products, Inc. applied
for registration of the trademark “UNIVERSAL CONVERSE AND DEVICE” used on rubber shoes and slippers.
Converse Rubber Corporation opposed the application
because the trademark sought to be registered is confusingly similar to the word “CONVERSE” which is part of
its corporate name. Also, it manufactures rubber shoes
described as All Star Converse Chuck Taylor. Applicant’s
witness had no idea why it chose “Universal Converse” as
trademark. Applicant itself gave no reasonable explanation for using “CONVERSE,” in its trademark.
HELD: The word “converse” is the dominant word
that identifies oppositor from other corporations engaged
in similar business. Applicant admittedly was aware of
oppositor’s reputation and business even before the former
applied for the registration of the trademark in question.
435
Art. 520
CIVIL CODE OF THE PHILIPPINES
Knowing that the word “converse” belongs to and is being used by oppositor and is in fact the dominant word
in the latter’s corporate name, the former has no right to
appropriate the same for use on its products which are
similar to those being produced by the latter. Applicant’s
unexplained use of the dominant word of oppositor’s corporate name gives rise to the inference that it was chosen
deliberately to deceive.
An application for registration of trademark or trade
name will be denied if confusing similarity exists between
the mark or name applied and that of a prior user of the
said mark or name, which would confuse the purchasing
public to the prejudice of the prior user. For purposes of
the law, it would suffice if similarities between two labels is such that there is a possibility or likelihood of the
purchaser of the older brand mistaking the new brand
for it. The details between the two labels need not all be
identical, as long as the general appearance of the two
products could deceive an ordinary or a not too perceptive
and discriminating customer. The determinative factor in
ascertaining whether or not marks are confusingly similar
to each other “is not whether the challenged mark would
actually cause confusion or deception of the purchasers,
but whether the use of such mark would likely cause
confusion or mistake on the part of the buying public.’’ A
boundless choice of words, phrases and symbols is available to one who wishes a trademark sufficient unto itself
to distinguish his product from those of others. When,
however, there is a reasonable explanation for the defendant’s choice of such a mark though the field for his
selection was so broad, the inference is inevitable that it
was chosen deliberately to deceive. The unexplained use
by a shoe manufacturer of the dominant word of another
shoe manufacturer’s corporate name lends itself open to
the suspicion of fraudulent motive to trade upon the latter’s reputation.
Sales invoices provide the best proof that there are
actual sales of a foreign registrant’s products in the country and that there was actual use for a protracted period of
its trademark or part of it through these sales. The most
436
CIVIL CODE OF THE PHILIPPINES
Art. 520
convincing proof of use of a trademark in commerce is
testimony of the customers or the orders of buyers during
a certain period. A customer who has no business connection with the manufacturer and testified as such customer
strongly supports the move for trademark pre-emption.
Sales of 12 to 20 pairs a month of the oppositor’s (a foreign
registrant) rubber shoes cannot be deemed insignificant,
considering that the shoes are of high expensive quality,
which not too many basketball players can afford to buy.
Any sale made by a legitimate trader from his store is a
commercial act establishing trademark rights since such
sales are made in due course of business to the general
public, not only to limited individuals. Actual sale of goods
in the local market establishes trademark use which
serves as the basis for an action aimed at trademark
pre-emption. The fact that a foreign corporation is not
licensed to do business in the country and is not actually
doing business here, does not mean that its goods are not
being sold here or that it has not earned a reputation or
goodwill as regards its products. The Director of Patents
was remiss in ruling that proofs of sales presented “was
made by a single witness who had never dealt with nor
had never known the oppositor x x x without oppositor
having a direct or indirect hand in the transaction to be
the basis of trademark pre-emption.
(f)
That which is merely descriptive or deceptively descriptive
or is primarily a surname (unless for the past 5 years,
it has become distinctive. (See Arce Sons and Company
v. Selecta Biscuit Co., et al., L-14761, L-17981, Jan. 28,
1961). Thus, although the word “Selecta” may be an ordinary or common word in the sense that it may be used or
employed by anyone in promoting his business or enterprise, still, once adopted or coined in connection with one’s
business as an emblem, sign, or device to characterize its
products, or as a badge of authenticity, it may acquire a
secondary meaning as to be exclusively associated with its
products and business. (Ibid.; see Ang Tibay v. Teodoro,
74 Phil. 50).
[NOTE: The denial of the registration of trademarks
does not violate the rule against ex post facto laws, be437
Art. 520
CIVIL CODE OF THE PHILIPPINES
cause trademark registerability is without any PENAL
aspect. (The East Pacific Merchandising Corporation v.
Dir. of Patents, et al., L-14377, Dec. 29, 1960).].
(g)
That which is contrary to public order or morality. (Sec.
123[m], RA 8293).
(5) Unfair Competition
There is unfair competition when there is infringement by
passing off one’s goods as those made by another contrary to
good faith. (See Amigo Manufacturing, Inc. v. Cluett Peabody
Co., Inc., GR 139300, Mar. 14, 2001). Imitation or similarity such that average customers may be deceived, should be
considered the test of infringement. (See Sec. 155.2, RA 8293;
Forbes v. Ang San To, 40 Phil. 272). Indeed, the similarity
in the appearance of the goods may justify the inference that
the defendant actually intended to deceive the public and to
defraud the plaintiff. Such a defendant may be declared an
unfair competitor even if his competing trademark is registered.
(People v. Lim Hoa, L-10612, May 30, 1958; see also Recaro v.
Embisan, L-17049, May 3, 1961).
Pro Line Sports Center, Inc. v. CA
88 SCAD 524
(1997)
That a corporation other than the certified owner of the
trademark is engaged in the unauthorized manufacture of
products bearing the same trademark engenders a reasonable
belief that a criminal offense for unfair competition is being
committed.
The test of unfair competition is whether certain goods have
been intentionally clothed with an appearance which is likely
to deceive the ordinary purchasers exercising ordinary case.
Tatad v. Sec. of Energy
89 SCAD 335
(1997)
The provision on predatory pricing is constitutionally
infirmed for it can be wielded more successfully by the oil
438
CIVIL CODE OF THE PHILIPPINES
Art. 520
oligopolists. Its cumulative effect is to add to the arsenal of
power of the dominant oil companies.
For as structured, it has no more than the strength of
a spider web — it can catch the weak but cannot catch the
strong, it can stop the small oil players but cannot stop the
big oil players from engaging in predatory pricing.
When one applies for registration of a trademark which
is almost the same or very closely resembles one already used
and registered by another, the application should be dismissed
outright, even without any opposition on the part of the owner
and user of a previously registered trademark. The Director of
Patents should as much as possible discourage all attempts at
imitation of trademarks already used and registered to avoid
confusion and to protect an already established goodwill. (Chuanchow Soy and Canning Co. v. Director of Patents and Rosario Villapania, L-13947, June 30, 1960). Even if an offending
trademark has already been changed, a suit for infringement
may still continue and the court may still issue a permanent
injunction against the infringer, for without such injunction,
the infringer might resume the use of the former trademark.
(Recaro v. Embisan, L-17049, May 31, 1961).
However, the registration of a patent for a device, which
is of “practical utility’’ to something already invented (hence a
“side-tilting dumping wheel-barrow’’ which is of “practical utility,’’ may be patented even if previously a patent had already
been issued to another for a “dumping and detachable wheelbarrow’’). (Samson v. Tarroza, et al., L-20354, July 28, 1969).
Manzano v. CA
86 SCAD 723
(1997)
Since the Patent Office is an expert body pre-eminently
qualified to determine questions of patentability, its findings
must be accepted if they are consistent with the evidence, with
doubts as to patentability resolved in favor of the Patent Office.
[NOTE: Said law on unfair competition is not only broader
but also more inclusive as compared to the law on trademark
439
Art. 520
CIVIL CODE OF THE PHILIPPINES
infringement. This is because such “conduct constitutes unfair
competition if the effect is to pass off on the public the goods
of one man as the goods of another.’’ (Mighty Corp. v. E. & V.
Gallo Winery, 434 SCRA 473 {2003}).].
Samson v. Judge Daway
434 SCRA 612
(2003)
Issue: Which court exercises jurisdiction over cases for
infringement of registered marks, unfair competition, false
designation of origin, and false description or representation?
Held: It is lodged with the regional trial court (RTC).
[NOTE: Sec. 239 of RA 8293 did expressly repeal RA 166
in its entirety, otherwise, it would not have used the phrases
“parts of Acts’’ and “inconsistent herewith.’’ The use of said
phrases only means that the repeal pertains only to provisions
which are repugnant or not susceptible of harmonization with
RA 8293. (Samson v. Dawag, supra).].
[NOTE: RA 8293 and RA 166 are special laws conferring
jurisdiction over violations of intellectual property rights (IPR)
to the RTCs which should, therefore, prevail over RA 7691,
which is a general law. (Samson v. Dawag, supra).].
[NOTE: The passing remark in Mirpuri v. CA (316 SCRA
516 [1999]), on the repeal of RA 166 by RA 8293 was merely
a backgrounder to the enactment of the present Intellectual
Property Code (IPC) and cannot, thus, be construed as a jurisdictional pronouncement in cases for violation of intellectual
property rights. (Samson v. Dawag, supra).].
Doctrine of ‘Equivalents’
It provides that an infringement also takes place when
a device appropriates a prior invention by incorporating its
innovative concept and, although with some modification and
change, performs substantially the same function in substantially the same way to achieve substantially the same result.
(Smith Kline Beckman Corp. v. CA, 409 SCRA 33 [2003]).
440
CIVIL CODE OF THE PHILIPPINES
Art. 520
Case
Ganuelas v. Cawed
401 SCRA 447
(2003)
To classify the donation as inter vivos simply because it
is founded on considerations of love and affection is erroneous — love and affection may also underline transfers mortis
causa.
William Sevilla v. Sevilla
402 SCRA 501
(2003)
A donation inter vivos is immediately operative and final.
Where the Attendance of a Wise Consent Renders the
Donation Voidable
Being an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it,
donation is like any other contract, wherein the agreement of
the parties is essential and the attendance of a wise consent
renders the donation voidable. In contrast, there is said to be
no consent and consequently no contract when the agreement
is entered into by one in behalf of another who has never
given him authorization therefor unless he has by law a right
to represent the latter. Thus, fraud and undue influence that
vitiated a party’s consent must be established by full, clear,
and convincing evidence — otherwise, the latter’s presumed
consent to the contract prevails. (Heirss of William Sevilla v.
Sevilla, 402 SCRA 501 [2003]).
(6) Remedies in Case of Infringement
(a)
Injunction. (Sec. 23, RA 8293).
(b)
Seizure and destruction of all necessary paraphernalia.
(Sec. 157, RA 8293).
(c)
Damages, which consist of:
441
Art. 520
CIVIL CODE OF THE PHILIPPINES
1)
reasonable profit the complainant would have made
(had there been no infringement); or
2)
actual profit which infringer made (or if this cannot
be easily determined, a reasonable percentage of
gross sales of infringer).
Almoradie v. CA
47 SCAD 12
(1994)
The Trademark Law provides that any person whose
trademark or tradename is infringed may recover damages in a civil action, and upon proper showing, may also
be granted injunction.
[NOTE: In case there was actual and intentional
fraud, double damages may be given. (Sec. 23, RA
166).].
[NOTE: Only the owner of a registered trademark or
tradename may sue for infringement thereof. (See Heng
and Dee v. Wellington Dept. Store, et al., L-4531, Jan. 10,
1953).].
(7) Grounds for the Cancellation of the Registration
Registration may be cancelled when:
(a)
there has been abandonment;
(b)
or the registration had been made fraudulently or
illegally;
(c)
when the registered name is used to misrepresent
the source of the goods;
(d)
when the name has become a generic or common
descriptive name. (Sec. 151, RA 8293).
[NOTE: In cancellation proceedings, the Director of Patents is NOT bound by the findings of facts by the court in a
criminal case for unfair competition for the issues are different. (Go San v. Director of Patents, et al., L-10563, Feb. 23,
1961).].
442
CIVIL CODE OF THE PHILIPPINES
Art. 520
Almoradie v. CA
47 SCAD 12
(1994)
The only effect of cancellation is that it would deprive
the registrant protection from infringement. Thus, petitioner’s continued use of respondent’s trademark on her product,
instead of the assigned mark “WONDER GH’’ is a clean act of
abandonment due to non-use, which is, in fact, a ground for the
cancellation of registration. The matter restricting the exclusive
use of a trademark is only true over unrelated goods.
As a condition precedent to registration, the trademark,
trade name or service mark should have been in actual use in
commerce in the Philippines before the time of the filing of the
application. (See Sec. 124.2, RA 8293).
Conrad & Co., Inc. v. CA
63 SCAD 232
(1995)
While an application for the administrative cancellation
of a registered trademark on any of the grounds enumerated
in Sec. 17 of RA 166 falls under the exclusive cognizance of
the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT), an action for infringement or unfair competition,
as well as the remedy of injunction and relief for damages,
is explicitly and unquestionably within the competence and
jurisdiction of ordinary courts.
An application with BPTTT for an administrative cancellation of a registered trademark cannot per se have the effect of
restraining or preventing the courts from the exercise of their
lawfully conferred jurisdiction.
Emerald Garment Manufacturing v. CA
66 SCAD 865
(1995)
The reckoning point for the filing of a petition for cancellation of a certificate of registration of a trademark is not
from the alleged date of use but from the date the certificate
443
Art. 520
CIVIL CODE OF THE PHILIPPINES
of registration was published in the Official Gazette and issued
to the registrant.
To be barred from bringing suit on grounds of estoppel
and laches, the delay must be lengthy.
(8) Protection of Foreign Trademarks and Names
In Asari Yoko Co. v. Kee Boc, et al., L-14086, Jan. 20, 1961,
the Supreme Court had occasion to rule that even if a foreign
trademark has not been registered in the Philippines, and even
if there is no formal commercial agreement between the Philippines and the foreign country involved, still if goods bearing
the foreign trademark have lawfully entered the Philippines,
the owner of said trademark must be protected, and other people may properly be excluded from the use of said trademark.
Modern trade and commerce demand that depredations on
trademarks on non-nationals should NOT be countenanced.
However, in the legitimate case of Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, et
al., L-19906, Apr. 30, 1969, it was ruled that registration of the
trademark “Bayer” in the United States does NOT of itself afford protection to its owner, because registration in the United
States is not registration in the Philippines.
(9) Some Decided Cases
Heng and Dee v. Wellington Department
Store, Inc., et al.
L-4531, Jan. 10, 1953
The name “Wellington,’’ being either geographical or a
surname, cannot be registered, and hence one cannot prevent
another from using the same.
The East Pacific Merchandising Corp. v.
Director of Patents, et al.
L-14377, Dec. 29, 1960
The term “Verbena’’ being descriptive of a whole genus of
garden plants with fragrant flowers, the use of the term can444
CIVIL CODE OF THE PHILIPPINES
Art. 520
not be denied to other traders using verbena extract or oils in
their own products.
Ang Tibay v. Teodoro
74 Phil. 50
A trademark will be refused registration if there will be
“confusion of origin.” This is the “confusion of origin” rule.
Sterling Products International, Inc. v.
Farbenfabriken Bayer Aktiengesellschaft, et al.
L-19906, Apr. 30, 1969
(1) The adoption alone of a trademark will NOT give
exclusive right thereto; it is its ACTUAL USE in commerce
that is the pre-requisite to the acquisition of ownership over
such trademark, for a trademark is a “creation of use.”
(2) The “confusion of origin’’ rule will not be used if the
alleged origin is not really the origin.
Asia Brewery, Inc. v. CA
GR 103543, July 5, 1993
43 SCAD 258
Infringement of trademark is a form of unfair competition.
Infringement, thus, is determined by the “test of dominancy’’
rather than by differences or variations in the details of one
trademark and of another.
“Pilsen’’ is a primarily geographically descriptive word,
hence, non-registrable and not approvable by any beer manufacturer. The use of someone else’s registered trademark,
tradename or service mark is unauthorized, hence, actionable,
if it is done without the consent of the registrant.
A merchant cannot be enjoined from using a type or color
of bottle where the same has the useful purpose of protecting
the contents from the deleterious effects of light rays. What is
all important is the name of the product written on the label
of the bottle for that is how one beer may be distinguished
from the others. Mere similarity in the shape and size of the
container and label, does not constitute unfair competition.
445
Art. 520
CIVIL CODE OF THE PHILIPPINES
Mirpuri v. CA
115 SCAD 648, 318 SCRA 516
(1999)
The Convention of Paris for the Protection of Industrial
Property, otherwise known as “The Paris Convention,’’ is a
multilateral treaty that seeks to protect industrial property
consisting of patents, utility models, industrial designs, trademarks, service marks, trade names and indications of source or
appellations of origin, and at the same time aims to REPRESS
unfair competition.
Art. 6bis of the Paris Convention governs protection of
well-known trademarks. This is a self-executing provision
and does not require legislative enactment to give it effect in
the member-country. For the power to determine whether a
trademark is well-known lies in the “competent authority of
the country of registration or use.’’
Canon Kabushiki Kaisha v. CA
GR 120900, July 20, 2000
When a trademark is used by a party for a product in which
the other party does not deal, the use of the same trademark on
the latter’s product cannot be validly objected to.
Amigo Manufacturing, Inc.
v. Cluett Peabody, Co., Inc.
GR 139300, Mar. 14, 2001
FACTS: Respondent is domiciled in the United States and
is the registered owner of the “Gold Toe’’ trademark. ISSUE:
Is it entitled to the protection of the Union Convention for the
Protection of Industrial Property adopted in Paris on Mar. 20,
1883, otherwise known as the Paris Convention, of which the
Philippines and the United States are members.
HELD: A foreign-based trademark owner, whose country
of domicile is a party to an international convention relating
to protection of trademarks, is accorded protection against
infringement or any unfair competition as provided in Sec. 37
of RA 166, the Trademark Law which was the law in force at
the time this case was instituted.
446
CIVIL CODE OF THE PHILIPPINES
Art. 521
Moreover, Sec. 20 of RA 166 provides as follows: “A certificate of registration of a mark or trade name shall be prima
facie evidence of the validity of the registration, the registrant’s
ownership of the mark or trade name, and of the registrant’s
exclusive right to use the same in connection with the goods,
business, or services specified in the certificate, subject to any
conditions and limitations stated therein.’’
Let it be remembered that the duly registered trademarks
are protected by law as intellectual properties and cannot be
appropriated by others without violating the due process clause.
An infringement of intellectual rights is no less vicious and
condemnable as theft of material property, whether personal
or not.
Thus, applicable is the Paris Convention whereupon
respondent is entitled to its protection. By virtue of the Philippines’ membership to said Convention, trademark rights
in favor of respondent have been created. The object of the
Convention is to accord a national of a member-nation extensive protection against infringement and other types of unfair
competition. (Puma Sports Chuh Fabriken Rudolf Dassler K.G.
v. Intermediate Appellate Court, 158 SCRA 233; La Chemise
Lacoste, S.A. v. Fernandez, 129 SCRA 373).
Philip Morris, Inc. v. Fortune
Tobacco Corp.
493 SCRA 333
(2006)
ISSUE: Does membership in the Paris Union automatically entitle petitioners to the protection of their trademarks
in the Philippines?
HELD: No, absent actual use of the marks in local commerce and trade.
Art. 521. The goodwill of a business is property, and may
be transferred together with the right to use the name under
which the business is conducted.
447
Art. 522
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) ‘Goodwill’ Defined
It is the advantage acquired by any product or firm because of general encouragement and patronage of the public.
Its elements are: place, name, and reputation. (See 24 Am. Jur.
803, 807).
(2) Goodwill as Property
While goodwill is considered property (Art. 521); it is not
an independent property which is separable from the firm or
business which owns it.
(3) Case
Cosmos Bottling Corp. v. NLRC
88 SCAD 511
(1997)
Private respondent made a mockery of the petitioner’s promotional campaign, and exposed the company to complainants
by those victimized by private respondent. At the very least,
the company’s goodwill and business reputation were ruined.
Art. 522. Trademarks and trade names are governed by
special laws.
COMMENT:
Applicability of Special Laws
Refer to RA 8293, otherwise known as the Intellectual
Property Code of the Philippines, approved June 6, 1997, and
effective Jan. 1, 1998. (See Amigo Manufacturing, Inc. v. Cluett
Peabody Co., Inc., GR 139300, Mar. 14, 2001).
448
CIVIL CODE OF THE PHILIPPINES
Title V. — POSSESSION
Chapter I
POSSESSION AND THE KINDS THEREOF
Art. 523. Possession is the holding of a thing or the enjoyment of a right.
COMMENT:
(1) Definition of ‘Possession’
(a)
Etymological — derived from “pos sedere” (“to be settled”)
— or “posse.”
(b)
Legal — the holding or control of a thing (this is possession proper); or the exercise of a right. (This is only
quasi-possession since a right is incorporeal.)
(2) Is Possession a Fact or a Right?
It is really a fact (since it exists); but from the moment
it exists, certain consequences follow, thus making possession
also a right.
(3) Viewpoints of Possession
(a)
Right TO possession (jus possidendi) — This is a right or
incident of ownership. (Example: I own a house; therefore
I am entitled to posses it.)
(b)
Right OF possession (jus possessionis) — This is an independent right of itself, independent of ownership.
(Example: I am renting a house from X. Although I
am not the owner, still by virtue of the lease agreement,
I am entitled to possess the house for the period of the
lease.)
449
Art. 523
CIVIL CODE OF THE PHILIPPINES
(4) Degrees of Possession
(a)
Mere holding or having, without any right whatsoever.
(This is the grammatical degree). (Example: possession
by a thief.)
(b)
Possession with a juridical title, but not that of an owner.
(Example: that of a lessee, pledgee, depositary.) (This is
called juridical possession.)
(c)
Possession with a just title, but not from the true owner
(This is called real possessory right.) (Example: A in good
faith buys an automobile from B who delivers same to A,
and who merely pretended to be the owner.)
[NOTE: Under Art. 430 of the old Civil Code, there
was a distinction between natural and civil possession.
The first was a physical holding (detention); the other was
natural possession, coupled with the intention of making
the thing or right as one’s own. This distinction has been
abolished, because at all events, all kinds of rightful possession are entitled to protection. Besides, the alleged
distinction was confusing, since the possession of a thief
under said old rule was one of civil possession, with the
thief intending to make as his own, the thing stolen.].
(d)
Possession with a title of dominium, that is, with a just
title from the owner. (This is really ownership or possession that springs from ownership.) (3 Sanchez Roman
405).
(5) Requisites or Elements of Possession
(a)
There must be a holding or control (occupancy, or taking
or apprehension) of a thing or a right. (This holding may
be actual or constructive.)
(b)
There must be a deliberate intention to possess (animus
possidendi). This is a state of the mind.
(c)
The possession must be by virtue of one’s own right. (This
may be because he is an owner or because of a right derived from the owner such as that of a tenant.)
450
CIVIL CODE OF THE PHILIPPINES
Art. 523
HENCE, an agent who holds is not truly in possession; it is the principal who possesses thru the agent.
(6) Holding or Detention
Holding or detention may be either actual or constructive
occupation. Hence, if a person assumes control over a big tract
of land although he actually possesses only one-fourth of it, he
is said to be in constructive possession of the rest. Possession
in the eyes of the law does not mean that a man has to have
his feet on every square meter of ground before it can be said
that he is in possession. (Ramos v. Director of Lands, 39 Phil.
175). It is, however, essential in constructive possession that
the property be not in the adverse possession of another. (See
Sarmiento v. Lesaca, L-15383, June 30, 1960).
(7) Classes of Possession
(8)
(a)
In one’s own name or in that of another. (Art. 524).
(b)
In the concept of owner (en concepto de dueno) and in the
concept of holder. (Art. 525).
(c)
In good faith (bona fide) or in bad faith. (mala fide).
Ownership is Different from Possession
Ownership is different from possession. A person may
be declared the owner, but he may not be entitled to possession. The possession (in the concept of holder) may be in the
hands of another, such as a lessee or a tenant. A person may
have introduced improvements thereon of which he may not
be deprived without due hearing. He may have other valid
defenses to resist surrender of possession. Hence, a judgment
for ownership does NOT necessarily include possession as a
necessary incident. (Jabon v. Alo, L-5094, Aug. 7, 1952). This
is moreover true only if there is the possibility that the actual
possessor has some rights which must be respected and defined.
Where the actual possessor has no valid right over the property
enforceable even against the owner thereof, the surrender of
the possession to the adjudged owner should be considered
included in the judgment. (Perez, et al. v. Evite, et al., L-16003,
Mar. 29, 1961).
451
Art. 523
(9)
CIVIL CODE OF THE PHILIPPINES
Cases
Spouses Medina and Bernal v.
Hon. Nelly Romero Valdellon
L-38510, Mar. 25, 1975
FACTS: A married couple sued for recovery of possession of
a parcel of land. The defendants presented a motion to dismiss
on the ground that a land registration case was pending between
the parties in another CFI branch of the same court. ISSUE:
should the recovery of possession case be dismissed?
HELD: No, because the issues in the two cases are different. The first deals with possession, the second, with ownership. Thus, the eventual decision in one will not constitute res
judicata for the other.
Heirs of Bofill v. CA
56 SCAD 73
(1994)
Possession is not a definite proof of ownership, nor is nonpossession inconsistent therewith.
Somodio v. CA
54 SCAD 374
(1994)
Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of the ground before
it can be said that he is in possession. (Ramos v. Director of
Lands, 39 Phil. 175 [1918]). It is sufficient that petitioner was
able to subject the property to the action of his will.
Garcia v. CA
110 SCAD 571, 312 SCRA 180
(1999)
Possession is defined as the holding of a thing or the enjoyment of a right while ownership exists when a thing pertaining
to one person is completely subjected to his will in a manner
452
CIVIL CODE OF THE PHILIPPINES
Art. 524
not prohibited by law and inconsistent with the rights of others.
(10) Physical Possession
When the primary issue to be resolved is physical possession, the issue should be threshed out in the ejectment suit, and
not in any other case such as an action for declaratory relief
to avoid multiplicity of suits. (Panganiban v. Pilipinas Shell
Petroleum Corp., 395 SCRA 624 [2003]).
[NOTE: The law does not require one in possession of a
house to reside in the house to maintain his possession. For
possession in the eyes of the law does not mean that a man has
to have his feet on every square meter of the ground before he
is deemed in possession. (Dela Rosa v. Carlos, 414 SCRA 226
[2003]).
Art. 524. Possession may be exercised in one’s own name
or in that of another.
COMMENT:
(1) Names Under Which Possession May Be Exercised
(a)
(b)
one’s own name
name of another
(2) Example
I may possess a piece of land myself or thru my agent.
Here if I possess the land myself, this is possession in one’s
own name; on the other hand, the agent possesses not in his
own name but in that of another. (See Alo v. Rocamora, 6 Phil.
197).
(3) Query — Who is in Actual Possession of a Rented Parcel
of Land?
The lessor, thru the tenant, is in actual possession of the
land (in the concept of owner, that is, if the lessor is NOT the
owner; if he is the owner, he is called the possessor-owner).
453
Art. 524
CIVIL CODE OF THE PHILIPPINES
The tenant, by himself, is in actual possession in the concept
of holder.
(4) Possession in Another’s Name
(a)
Voluntary — as when an agent possesses for the principal
(by virtue of agreement).
(b)
Necessary — as when a mother possesses for a child still
in the maternal womb.
[NOTE: Here the mother does not possess the child;
she possesses FOR him.].
(c)
Unauthorized — (This will become the principal’s possession only after there has been a ratification without
prejudice to the effects of negotiorum gestio.)
[NOTE: Even a servant, guard, or laborer may possess in another’s name — see Alguer and Castan. (See 4
Manresa 87-88).].
(5) Right of the Landlord Himself to Bring Suit Against an
Intruder
QUESTION: If a tenant is ousted by an intruder, the
tenant is undoubtedly given the right to bring an action of
forcible entry. Now then, suppose it is the landlord himself
who institutes the suit against the intruder, would the action
prosper?
ANS.: Yes, for after all, the landowner was really in actual
possession, thru the tenant. Moreover, unless he would be allowed this right, there is a danger he may eventually lose his
possession over the same, and suffer serious inconvenience. It
should be noted also that under Art. 1673 (of the Civil Code)
the tenant is required to give notice to the owner of any usurpation which a stranger may do. It can be inferred from this
that the owner can maintain his possession, by suit, if this is
essential. (See Simpao v. Dizon, 1 Phil. 261).
(6) Query Re Cursory Visits to Object
Suppose I visit a certain piece of land once in a while and
I declare for taxation purposes the fact that the land belongs
454
CIVIL CODE OF THE PHILIPPINES
Art. 524
to me, does this necessarily mean that I am in possession of
the lands?
HELD: Not necessarily, for these facts, by themselves (See
Ramirez v. Dir. of Lands, 60 Phil. 114) do not show possession.
[NOTE: The holding however of an informacion possessoria or
possessory information is considered evidence of possession
under Art. 394 of the Spanish Mortgage Law. (See Bishop of
Nueva Segovia v. Municipality of Bantay, 24 Phil. 347).].
(7) Case
Jose De Luna v. CA, et al.
GR 94490, Aug. 6, 1992
Well-established is the rule in ejectment cases that the
only issue to be resolved therein is who is entitled to the
physical or material possession of the premises, or possession
de facto, independent of any claim of ownership that either
party may set forth in their pleadings. If petitioner can prove
prior possession in himself, he may recover such possession
even from the owner himself. Whatever may be the character
of his prior possession, if he has in is favor priority of time,
he has the security that entitles him to stay on the property
until he is lawfully ejected by a person having a better right
by either accion publiciana or accion reivindicatoria. However,
where the question of possession can not be resolved without
deciding the question of ownership, an inferior court has the
power to resolve the question of ownership but only insofar as
to determine the issue of possession.
In the case at bar, the inferior court acted correctly in
receiving evidence regarding the ownership of the disputed
property, inasmuch as respondent Dimaano, Jr. claimed to
possess the property by virtue of a lease agreement with the
alleged owner thereof, Agustin Dequiña, Jr.
Be that as it may, the respondent Court erred in upholding the Regional Trial Court regarding the conclusion that the
subject property is owned by Agustin Dequiña, Jr. and therefore
respondent Dimaano, Jr. is entitled to possess the same. First
of all, petitioner has shown that he had prior possession of the
455
Art. 524
CIVIL CODE OF THE PHILIPPINES
property. The prior possession of petitioner was established
by the testimony of his witnesses, notably that of his tenant
Epigenio Dilag and Victor dela Cruz. While petitioner admitted that he declared the property for taxation purposes only
in 1957, he had possessed the property beginning 1953 at the
very latest, when he leased the same to Epigenio Dilag, who in
turn possessed the same until respondent Dimaano, Jr. entered
upon the property in 1972. The possession of the property by
Dilag since 1953 redounds to the benefit of petitioner, since
possession may be exercised in one’s own name or in that of
another. (Art. 524, Civil Code). Moreover, there is evidence to
the effect that petitioner possessed the property even earlier
than 1953. Petitioner’s witness, Victor dela Cruz, who lived
about 400 meters from the land in controversy, testified that
he had witnessed the delivery of the property to the petitioner
and his mother Apolonia Dequiña by Agustin Dequiña, Sr. in
1938, when they and their brothers and sisters partitioned
among themselves the properties of their deceased parents. He
further testified that he saw petitioner and his mother cultivate
the land from 1938 to 1941, and that he leased the land from
them from 1944 to 1952.
Upon the other hand, respondent Dimaano, Jr. had failed
to prove that Agustin Dequiña, Jr. possessed the property prior
to his possession, much less the ownership of the latter over
said property. While Agustin Dequiña, Jr. testified that he is a
co-owner of the disputed property, there is nothing to support
this self-serving claim; neither does his testimony support the
defense’s theory that he had prior possession of the property.
The mere fact that Agustin Dequiña, Sr. had declared the
subject property for taxation purposes from 1908 up to 1945
did not constitute possession thereof, nor is it proof of ownership in the absence of Dequiña, Jr.’s actual possession of said
property. Therefore, the Court of Appeals erred in ruling that
Agustin Dequiña, Jr. was the owner of the disputed property
since there is no evidence whatsoever to support such a conclusion. However, it goes without saying that this case does not
bar petitioner and Agustin Dequiña, Jr. from resolving the issue of ownership over the disputed property in an appropriate
proceeding.
456
CIVIL CODE OF THE PHILIPPINES
Art. 525
Art. 525. The possession of things or rights may be had
in one of two concepts: either in the concept of owner, or in
that of the holder of the thing or right to keep or enjoy it,
the ownership pertaining to another person.
COMMENT:
(1) Concept of Owner or Holder
(a)
In the concept of owner, other people believe thru my
actions, that I am the owner of the property, hence considered in the opinion of others as owner. This is regardless of my good faith or bad faith. Otherwise stated, a
possessor in the concept of an owner is one who, whether
in good or in bad faith, CLAIMS to be, and ACTS as if he
is, the owner. He thus recognizes no title of ownership in
another, with respect to the property involved. Whether
he is in good faith or bad faith is immaterial.
[NOTE: This is the possession that may ripen into
ownership. (See 4 Manresa 81-82). This is also referred
to as adverse possession.].
Cruz v. Court of Appeals
L-40880, Oct. 13, 1979
Adverse possession or acts of dominion in derogation
of owner’s interest may include the construction of permanent buildings and the collection of rentals, harvesting
of the fruits of fruit-bearing trees, the giving of advice as
to the boundaries of adjoining properties, the payment
religiously of the taxes on the property.
(b)
In the concept of holder, here I recognize another to be
the owner.
(2) Examples in General
I purchased land from X knowing him not to be the owner.
But I exercise acts of ownership over it and my friend believe
I am the owner. In time, thru prescription, I may become the
owner because my possession is in concepto de dueno. If a
457
Art. 526
CIVIL CODE OF THE PHILIPPINES
tenant leases the land from me, he possesses the land in the
concept of holder (although it may be said that he possesses
the “lease right” — the right to the lease — in the concept of
owner). (4 Manresa, pp. 87-88).
(3) Specific Examples of Possession in the Concept of Holder
(a)
that of the tenant;
(b)
that of the usufructuary;
(c)
that of the depositary;
(d)
that of the bailee in commodatum.
[NOTE: The possession is of the property concerned.
Regarding their respective rights (the lease right, the usufruct, the right to safeguard the thing, the right to use
the thing), all are possessed by them, respectively, in the
concept of owner.
HENCE, we distinguish between:
1)
possession of the THING itself.
2)
possession of the RIGHT TO ENJOY the thing (or
benefit from it).].
Art. 526. He is deemed a possessor in good faith who is
not aware that there exists in his title or mode of acquisition
any flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in
any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may
be the basis of good faith.
COMMENT:
(1) Possession in Good Faith or Bad Faith
It is useless to speak of an owner as a possessor in good
faith or bad faith (except insofar as to point out whether or
458
CIVIL CODE OF THE PHILIPPINES
Art. 526
not in the meantime he is entitled to possess). This is because
when the law in Art. 526 distinguishes good and bad faith, there
must be a flaw. If aware of it, the possessor is in BAD faith; if
not aware, he is in GOOD faith. If there is no flaw at all, the
article should not apply.
(2) ‘Possessor in Good Faith’ Defined
One who is not aware that there exists in his TITLE or
MODE of acquisition any flaw which invalidates it. (DBP v.
CA, 316 SCRA 650 [1999]).
(Example: I bought a bullet proof Mercedez Benz car from
another and paid him very good money for it, but it turns out
that he is not the owner and that he had merely deceived
me.)
[NOTE: Good faith or lack of it is in the last analysis a
question of intention. It is a fact which is intangible, and is
evidenced by external signs. (See Leung Lee v. Strong, 37 Phil.
644).].
[NOTE: The belief must be a reasonable, not capricious,
one. Hence, if I do not know why a certain Mont Blanc fountain pen ever came into my possession, I will not be justified
in thinking that it is my own. (See 4 Manresa 98).].
[NOTE: While the possessor in good faith is one who BELIEVES he is the owner, the possessor in the concept of owner
is one who ACTS as if he is the owner.].
Pura Carreon, et al. v. Rufo Agcaoili, et al.
L-11156, Feb. 23, 1961
FACTS: Rufo Agcaoili purchased a parcel of land from
Celerina Dawag Carreon, under whose name the land was
registered. In truth, however, the land was owned by the seller
in common with her children. Rufo did not know that Celerina
had children, although they were townmates. There was no
encumbrance or burden annotated on the Torrens Certificate of
Title except the law lien stated in Sec. 4, Rule 74 of the Rules of
Court (which section grants to an heir or other person unduly
deprived of his lawful participation in an estate, the right to
459
Art. 526
CIVIL CODE OF THE PHILIPPINES
compel a judicial settlement of the estate for the purpose of
satisfying such lawful participation). This lien however (which
is effective only for two years) had already expired (and had
become a functus oficio). ISSUE: Was Rufo a purchaser in good
faith?
HELD: Yes, on the basis of the facts hereinabove stated.
Fraud cannot be presumed. It must be established by clear
and convincing evidence. Rufo had a right to rely on the certificate of title. And the only lien it contained was no longer
effective.
[NOTE: If I enter upon an inheritance thinking I am the
only heir, I should be considered in good faith, unless facts
exist which show that I should have known of the existence of
other heirs.].
[NOTE: If the wife and children are in possession of a
parcel of land and have made improvements thereon, unaware
that the husband had previously donated said land to somebody
else, the wife and the children are considered in good faith, and
the improvements should be governed by the rules of accession
and possession in good faith. (Liguez v. Court of Appeals, L11240, Dec. 18, 1957).].
Benin, et al. v. Tuason, et al.
L-26127, June 28, 1974
Juan Alcantara, et al. v.
Mariano Severo Tuason, et al.
L-26128, June 28, 1974
ISSUE: If a buyer knows at the time of purchase that the
lot he is acquiring, is in the possession of a person other than
the seller, is he necessarily a buyer in bad faith?
HELD: He is not necessarily a buyer in bad faith. After
all, a possessor is not necessarily the owner of the property
possessed. Besides, he may be possessing only a portion of the
land involved, or his possession may be with the knowledge and
tolerance of the owner. Finally, the rights of a mere possessor
are unavailing as against a seller who is armed with a Torrens
Title over the property involved.
460
CIVIL CODE OF THE PHILIPPINES
Art. 526
Republic of the Phils. Bureau of Forest Development
v. IAC and Hilario R. Rama
GR 69138, May 19, 1992
Good faith which entitles the possessors to necessary expenses with right of retention until reimbursement is explained
in the case: “On the matter of possession of plaintiffs-appellants, the ruling of the Court of Appeals must be upheld. There
is no showing that plaintiffs are not purchasers in good faith
and for value. As such title-holders, they have reason to rely on
the indefeasible character of their certificates.’’ On the issue of
good faith of the plaintiffs, the Court of Appeals reasoned out:
‘The concept of possessors in good faith given in Art. 526 of
the Civil Code and when said possession loses this character
under Art. 528, needs to be reconciled with the doctrine of
indefeasibility of a Torrens Title. Such reconciliation can only
be achieved by holding that the possessor with a Torrens Title
is not aware of any flaw in his Title which invalidates it until
his Torrens Title is declared null and void by final judgment
of the courts.
“Even if the doctrine of indefeasibility of a Torrens
Title were not thus reconciled, the result would be the
same, considering the third paragraph of Art. 526 which
provides that: ‘Mistake upon a doubtful or difficult question of law may be the basis of good faith. The legal question whether plaintiff-appellants’ possession in good faith,
under their Torrens Titles acquired in good faith, does not
lose this character except in the case and from the moment their Titles are declared null and void by the Courts,
is a difficult one. Even the members of this Court were
for a long time divided, two to one, on the answer. It was
only after several sessions, where the results of exhaustive researches on both sides were thoroughly discussed,
that an undivided Court finally found the answer given
in the preceding paragraph. Hence, even if it is assumed
for the sake of argument that the Supreme Court would
find that the law is not as we have stated it in the next
preceding paragraph and that the plaintiffs-appellants
made a mistake in relying thereon, such mistake on a
difficult question of law may be the basis of good faith
does not lose this character except in the case and from
461
Art. 526
CIVIL CODE OF THE PHILIPPINES
the moment their Torrens Titles are declared null and
void by the Courts.’ ’’
Under the circumstances of the case, especially where the
subdivision plan was originally approved by the Director of
Lands, we are not ready to conclude that the above reasoning of the Court of Appeals on this point is a reversible error.
Needless to state, as such occupants in good faith, plaintiffs
have the right to the retention of the property until they are
reimbursed the necessary expenses made on the lands.
With respect to the contention of the Republic of the
Philippines that the order for the reimbursement by it of such
necessary expenses constitutes a judgment against the government in a suit not consented to by it, suffice it to say that the
Republic, on its own initiative, asked and was permitted to
intervene in the case and thereby submitted itself voluntarily
to the jurisdiction of the court.
Reyes v. CA
GR 110207, July 11, 1996
72 SCAD 126
Regarding the requirement of good faith, the first paragraph of Article 526 states, thus: “He is deemed a possessor
in good faith who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.’’
From the abovecited provision, petitioners could not have
been possessors in good faith of the subject parcel of land
considering the finding that at the very inception, they forged
the Deed of Extrajudicial Partition and Settlement which they
claim to be the basis for their just title. Having forged the Deed
and simulated the signatures of private respondents, petitioners, in fact, are in bad faith. The forged Deed containing private
respondents’ simulated signatures is a nullity and cannot serve
as a just title.
(3) ‘Possessor in Bad Faith’ (mala fide) Defined
One who is not in good faith. (Hence, if circumstances
exist that require a prudent man to investigate, he will be in
bad faith if he does not investigate.)
462
CIVIL CODE OF THE PHILIPPINES
Art. 526
Examples:
(a)
If I buy properties from X, after having been warned by a
friend that X’s title was defective, and I made no investigation, I would be a vendee and possessor in bad faith. “A
purchaser cannot close his eyes to facts which should put
a reasonable man upon his guard, and then claim that
he acted in good faith under the belief that there was no
defect in the title of the vendor.’’ (Leung Lee v. Strong,
37 Phil. 644). In the Leung Lee case, the Supreme Court
held that “a party’s mere refusal to believe that a defect
exists or his willful closing of his eyes to the possibility
of the existence of a defect in his vendor’s title will not
make him an innocent purchaser for value if it afterwards
develop that the title was in fact defective.” Thus, a buyer
of registered land who fails to act with the diligence of a
prudent man cannot be a purchaser in good faith. (RFC
v. Javillonar, L-14224, Apr. 25, 1960).
[NOTE: In the case of Carlos Manacop, Jr. v. Faustino Cansino, L-13971, Feb. 27, 1961, the Supreme Court
held that if a purchaser of land had visited the land about
9 months before the purchase and had learned of another
person’s open, public, peaceful, and adverse possession
of the same, he is aware of sufficient fact to warrant an
inquiry into the status of the title to the land. If he does
not so investigate, he cannot legally claim the rights of a
purchaser in good faith. It was also therein held that if the
trial court finds a purchaser to be in bad faith, and said
purchaser appeals directly to the Supreme Court (which
ordinarily has no jurisdiction to entertain questions of
facts, he has, by said act, waived the right to question
such finding by the trial court.].
Republic v. Court of Appeals
102 SCRA 331
Before one purchases real property, he must make
inquiries regarding the rights if any of those in possession
thereof.
463
Art. 526
CIVIL CODE OF THE PHILIPPINES
J.M. Tuason and Co., Inc. v. Atanacio Munar
L-21544, Sep. 30, 1968
FACTS: A transferee of a certain Munar constructed
a building on land owned by J.M. Tuason and Co., as
evidenced by the latter’s Torrens Title thereto. The transferee however alleges that the Title (issued more than 20
years ago) was void and fraudulent; moreover, he claims
rights of a possessor in good faith.
HELD: The transferee of Munar is a possessor in
bad faith. Firstly, he is barred from assailing a decree
of registration in favor of Tuason and Co., twenty years
after its issuance. Secondly, in view of the presumptive
knowledge of the Torrens Title (in favor of Tuason and
Company), the transferee cannot in good conscience say
now that he believed that his vendor, Munar, had rights
of ownership over the lot purchased. He chose to ignore
Tuason’s Torrens Title, and relied instead on Munar’s
claim of ownership, perhaps because said course appeared
to him as more advantageous; hence, he has only himself
to blame for the consequences that followed. Good faith
cannot now be alleged.
Republic v. Diaz
L-36486, Aug. 6, 1979
A lessee who continues to stay on the premises after
the expiration of the lease contract is a usurper having
no more right to the use and enjoyment of the premises.
He has become a possessor in bad faith.
(b)
Purchaser from a suspected thief.
(c)
Purchaser at a public auction sale of property subject to
litigation or to third-party claim. (Too Lan Co. v. Laureana,
L-46173; Director of Lands v. Martin, 47 O.G. 120).
(d)
Purchaser from a person with a forged title. (Valdez v.
Pine, (CA) L-9848, Mar. 18, 1946). In Rivera v. Tirona,
et al., L-12328, Sep. 30, 1960, it was held that one who
buys land from a person who is NOT the registered owner
is not considered a subsequent purchaser who takes the
certificate of title for value and in good faith and who is
464
CIVIL CODE OF THE PHILIPPINES
Art. 526
protected against any encumbrance except those noted
on said certificate. In order to enjoy the full protection of
the registration system, the purchaser must be a holder
in good faith of such certificate.
(e)
Squatters on church land who know it to be temporarily
abandoned because of war. (See Roman Catholic Church
v. Municipalities, 10 Phil. 1).
(f)
A tenant who continues to occupy the property leased after the period of lease has expired, and has already been
asked to leave (Jison v. Hernaez, 74 Phil. 66), or the wife
of a tenant who (referring to the wife) claims ownership
over the property despite the fact that she knows of the
lease contract entered into by her husband. (See Lerma
v. de la Cruz, 7 Phil. 581).
(g)
A purchaser from a tenant of the property, the purchaser
knowing that the property belonged to another. (Paula
Guzman v. Fidel Rivera, 4 Phil. 621).
(h)
Persons who take possession of hereditary estate of a relative and deliberately excluded from the estate the child
of the deceased. (Bagoba, et al. v. Hon. Fernandez, et al.,
L-11539, May 19, 1958).
(i)
While one who buys from the registered owner does NOT
need to look behind the certificate of title, one who buys
from one who is NOT the registered owner (such as impostor-forger) is expected to examine not only the certificate
of title but all factual circumstances necessary for him to
determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land. The failure of the
purchaser to make the necessary investigation constitutes
lack of good faith. Not being a purchaser in good faith, he
is NOT entitled to the rights of a registered owner. (Revilla
v. Galindez, L-9940, Mar. 30, 1960).
(j)
An attorney at law who purchased land in Quezon City
from a seller who informed him that although the land
had no Torrens Title, he (the seller) nonetheless was
willing to bind himself to issue a clear title to the land.
(Republic v. Aricheta, L-15589, May 31, 1961 — where
the court discovered that the land had already a Torrens
465
Art. 526
CIVIL CODE OF THE PHILIPPINES
Title issued in favor of a person NOT the seller. In this
case, the Court also stated that as an attorney-at-law,
the buyer ought to have known that no property around
Manila or in Quezon City is as yet NOT covered by a
Torrens Title. Moreover, the statement in the deed of
sale that the seller was guaranteeing title shows that the
buyer must have doubted the validity of his vendor’s title
to the property).
(k)
A buyer of land already in the peaceable possession of a
person other than the seller, who does not inquire into the
status of the land or the title of the seller of the property
should be considered one in bad faith and must suffer the
consequences of the risk taken. (Salvoro v. Tañega, et al.,
L-32988, Dec. 29, 1978, 87 SCRA 349).
(4) Query
If a person is aware of the defects of his predecessor’s
title, should he be considered in good faith or in bad faith?
ANS.: Although Manresa says he should be considered
in good faith because after all, the law speaks of his title, not
that of the predecessor, still the fact remains that he is not
allowed to get from a person who is not the owner. Therefore,
we should consider him in bad faith unless of course he has
valid reasons to believe that his own title is good.
Roque v. Lapuz
L-32811, Mar. 31, 1980
A person in bad faith is not entitled to the privilege of
having a court give him a longer term for the fulfillment of his
obligation.
NOTA BENE: Bad faith or malice, the lesser evil of the
two, the Court has once said, implies a conscious and intentional design to do a wrongful act for a dishonest purpose or
moral obliquity. Bad faith is different from the negative idea
of negligence in that malice or bad faith contemplates a state
of mind affirmatively operating with futive design or ill-will.
(Equitable Banking Corp. v. NLRC, 83 SCAD 303 [1997]). It
means breach of a known duty thru some motive. (Equatorial
Realty Development, Inc. v. Anunciacion, Jr., 88 SCAD 87
466
CIVIL CODE OF THE PHILIPPINES
Art. 526
[1997]). Bad faith partakes of the nature of fraud. (See Philippine Stock Exchange, Inc. v. CA, 88 SCAD 589 [1997]).
(5) Effect of Erroneous Final Judgment
Llanos v. Simborio
L-9704, Jan. 18, 1957
FACTS: A war evacuee entered a parcel of land belonging
to another, and when asked to vacate by the owner, refused
to do so on the ground that he was merely a war evacuee. The
landowner then permitted him to stay, for then he had no other
place to go. Subsequently, he introduced some improvements
on the land. The Court of Appeals declared both of them in bad
faith and said that their rights must be determined as if both
has acted in good faith. So the landowner was required to refund
the value of the improvement. The landowner did not appeal,
and the judgment became final. Later, a case was brought, concerning the necessity of the refund.
ISSUES:
(a)
Was the decision of the Court of Appeals correct?
(b)
Can the evacuee be ousted even without reimbursement?
HELD:
(a)
The decision of the Court of Appeals was wrong
because the landowner, under the premises did not
act in bad faith.
(b)
Nevertheless, since the wrong decision was not appealed, and had therefore become final, the decision
remains and the landowner must reimburse if he
wants the ouster.
(6) Mistake on a Doubtful or Difficult Question of Law
Mistake upon a doubtful or difficult question of law
(provided that such ignorance is not gross and therefore inexcusable) may be the basis of good faith. (Art. 526; see also
Kasilag v. Rodriguez, 69 Phil. 217). It is true that “ignorance
467
Art. 526
CIVIL CODE OF THE PHILIPPINES
of the law excuses no one” but error in the application of the
law, in the legal solutions arising from such application, and
the interpretation of doubtful doctrine can still make a person
a transgressor, violator, or possessor in good faith. For indeed,
ignorance of the law may be based on an error of fact. (See 4
Manresa 100-102).
Kasilag v. Rodriguez
40 O.G. 17, 3rd Supp., p. 247
FACTS: Emiliana Ambrosio was the owner of a parcel
of land obtained thru a homestead patent. Under Sec. 116 of
the Public Land Act, such land could not be mortgaged or encumbered within a period of 5 years from the time the patent
was issued. Emiliana nevertheless turned over the land’s possession to X by virtue of the contract of antichresis to secure a
debt. Should X be considered a possessor in good faith or bad
faith?
HELD: X should be considered a possessor in good faith,
even if the contract in his favor is prohibited by the law. For
while gross and inexcusable ignorance of the law may not be
the basis of good faith, slight ignorance may be excusable in
his case, considering that he is not a lawyer or a jurist who is
supposed to know the various intricacies of a contract of antichresis. He should therefore be considered a possessor in good
faith.
[NOTE: It would be seen that according to the Code Commission, mistake or ignorance of a law by itself cannot be the
basis of good faith — the law must be one that is “doubtful” or
“difficult.” Query — is there really any law or legal provision
that is NOT “doubtful” or “difficult” to understand?].
(7) Bad Faith Is Personal
Just because a person is in bad faith (knows of the defect
or flaw in his title) does not necessarily mean that his successors-in-interest are also in bad faith. As a matter of fact, a child
or heir may even be presumed in good faith, notwithstanding
the father’s bad faith. (See Art. 534; see also Sotto v. Enage,
[CA] 43 O.G. 5057).
468
CIVIL CODE OF THE PHILIPPINES
Art. 527
Art. 527. Good faith is always presumed, and upon him
who alleges bad faith on the part of a possessor rests the
burden of proof.
COMMENT:
(1) Presumption of Good Faith
Reason: The presumption of innocence is given because
every person should be presumed honest till the contrary is
proved. (See U.S. v. Rapinan, 1 Phil. 294).
Ballatan v. CA
104 SCAD 30, 304 SCRA 34
(1999)
Good faith is always presumed, and upon him who alleges
bad faith on the part of a possessor rests the burden of proof.
Thus, where a person had no knowledge that he encroached on his neighbor’s lot, he is deemed a builder in good
faith until the time the latter informed him of his encroachment
on the latter’s property.
(2) When No Evidence is Presented Showing Bad Faith
If no evidence is presented proving bad faith, the presumption of good faith remains. (Sideco v. Pascua, 13 Phil. 342).
This is so even if the possessor has profited, as when he had
rented the land to others. (Labajo v. Enriquez, L-11093, Jan.
27, 1958).
Technogas Phils. Mfg. Corp.
v. Court of Appeals
79 SCAD 290
(1997)
Art. 527 of the Civil Code presumes good faith, and since
no proof exists to show that the encroachment over a narrow,
needle-shaped portion of private respondent’s land was done
in bad faith by the builder of the encroaching structures, the
latter should be presumed to have built them in good faith.
469
Art. 528
CIVIL CODE OF THE PHILIPPINES
(3) One Effect of Possession in Good Faith
If at a mortgage sale (which later turns out to be void),
the mortgagee-buyer takes possession of a house on the lot,
he should be considered a possessor in good faith and would
not be responsible for the subsequent loss of the house thru a
fortuitous event. (Cea v. Villanueva, 18 Phil. 538).
Art. 528. Possession acquired in good faith does not lose
this character except in the case and from the moment facts
exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully.
COMMENT:
(1) When Possession in Good Faith is Converted to Possession in Bad Faith
(a)
From the moment facts exist showing the possessor’s
knowledge of the flaw, from that time should he be considered a possessor in bad faith. (Art. 528).
(b)
It does not matter whether the “facts” were caused by him
or by some other person. (4 Manresa 117).
[NOTE: Under the old law, the word “acts” was used
instead of “facts.” The Code Commission used “facts” because this term is BROADER, and necessarily includes
“acts.”].
(2) When Bad Faith Begins
Existence of bad faith may begin either from the receipt
of judicial summons (See Tacas v. Tobon, 53 Phil. 356), or even
before such time as when a letter is received from the true owner
asking the possessor to stop planting on the land because somebody else owns it. (See Ortiz v. Fuentebella, 27 Phil. 537). What
the possessor should do upon receipt of the letter would be to
investigate; and if he does not, but is later on defeated, bad faith
should be counted not from the time of summons, but from the
time he first received the letter. Although receipt of summons
will ordinarily produce a conversion from good faith to bad faith,
it may be possible that a possessor will still be convinced of the
470
CIVIL CODE OF THE PHILIPPINES
Art. 528
righteousness of his cause, thus preserving his original good
faith. This is why if he originally was in good faith, he would
not be responsible in case of loss thru fortuitous event, even if
the loss should occur during the trial. Upon the other hand, had
he been really in bad faith all the time, the loss by fortuitous
event would not excuse him. (See Art. 552).
(3) Cases
Felices v. Iriola
L-11269, Feb. 28, 1958
FACTS: A homestead was sold within five years from the
issuance of the patent, and therefore, under Sec. 118, Com. Act
No. 141 as well as Art. 1409 of the Civil Code, the sale was
null and void. After the seller offered to “redeem” or get back
the land, the buyer refused and instead made improvements
on the land. Said construction of improvements continued even
after the judicial action to recover the land had been filed.
ISSUE: Is the buyer a possessor and builder in bad faith
despite the knowledge of both parties that the sale was illegal?
HELD: Yes. It is true that the contract was illegal and
void, and that both knew of the illegality of the sale, and are
therefore in a sense in pari delicto. But it cannot be said that
the rights of both are as though they both had acted in good
faith — because after the buyer had refused to restore the
land to the seller, the latter could no longer be regarded as
having impliedly assented or conformed to the improvements
thereafter made by the buyer. Moreover, the buyer continued to
act in bad faith when he made such improvements. He should
consequently lose whatever he had built, planted, or sowed in
bad faith, without right to indemnity.
The Heirs of Proceso Bautista, represented
by Pedro Bautista v. Spouses Severo
Barza and Ester P. Barza, and CA
GR 79167, May 7, 1992
Petitioner’s contention that the action for recovery of
possession had prescribed when the Barzas filed it on Dec. 12,
471
Art. 528
CIVIL CODE OF THE PHILIPPINES
1968 is erroneous for it was filed within the ten-year period
for enforcing a judgment, which in this case is the May 5,
1959 decision of the Secretary of Agriculture and Natural Resources as provided for in Art. 1144 of the Civil Code. Hence,
the ultimate issue in this case is whether or not the Barzas
may rightfully seek enforcement of the decision of the Director of Fisheries and that of the Secretary of Agriculture and
Natural Resources, notwithstanding their refusal to reimburse
the Bautistas for the improvements in the area. We find that
the peculiar circumstances of this case compel as to rule in the
affirmative.
Although Bautista was in possession of the area for quite
a number of years, he ceased to become a bona fide possessor
upon receipt of the decision of the Director of Fisheries granting due course to Barza’s fishpond application. Under Art. 528
of the Civil Code, “(p)ossession acquired in good faith does not
lose its character except in the case and from the moment facts
exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully.’’ Thus, Bautista
should have desisted from introducing improvements on the
property when he learned that Barza’s application had been
approved. However, Bautista may not be solely faulted for
holding on the area notwithstanding that he had no right over
it. The Barzas, after receiving the administrative decision in
their favor, should have complied with its directive to reimburse the Bautistas for the improvements introduced thereon.
This is not to say, however, that such failure to abide by the
decision of the Director of Fisheries rendered “stale’’ the said
decision. There is also the established fact that Bautista refused
the payments tendered by the Barzas. However, the Barzas’
failure to question the last reappraisal of the improvements
constituted inaction on their part, for which they should bear
its consequences.
Development Bank of the Phils. v.
Court of Appeals
114 SCAD 197, 316 SCRA 650
(1999)
When a contract of sale is void, the possessor is entitled to
keep the fruits during the period for which it held the property
472
CIVIL CODE OF THE PHILIPPINES
Art. 529
in good faith, which good faith of the possessor ceases when
an action to recover possession of the property is filed against
him and he is served summons therefor.
David v. Malay
115 SCAD 820, 318 SCRA 711
(1999)
A person in actual possession of a piece of land under
claim of ownership may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his right
and that his undisturbed possession gives him the continuing
right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim.
Art. 529. It is presumed that possession continues to be
enjoyed in the same character in which it was acquired, until
the contrary is proved.
COMMENT:
(1) Continuity of the Character of the Possession
This Article is another presumption regarding possession.
(2) Some Presumptions Regarding Possession
(a)
GOOD FAITH — “Good faith is always presumed.’’ (Art.
527).
(b)
CONTINUITY OF CHARACTER OF POSSESSION
(whether in good faith or bad faith — “It is presumed that
possession continues to be enjoyed in the same character
in which it was acquired, until the contrary is proved.’’
(Art. 529).
(c)
NON-INTERRUPTION OF POSSESSION — “The possession of hereditary property is deemed transmitted to
the heir without interruption, and from the moment of the
death of the decedent, in case the inheritance is accepted.
One who validly renounces an inheritance is deemed never
to have possessed the same.” (Art. 533).
473
Art. 530
CIVIL CODE OF THE PHILIPPINES
(d)
PRESUMPTION OF JUST TITLE — “A possessor in the
concept of owner has in his favor the legal presumption
that he possesses with just title, and he cannot be obliged
to show or prove it.’’ (Art. 541).
(e)
NON-INTERRUPTION OF POSSESSION OF PROPERTY UNJUSTLY LOST BUT LEGALLY RECOVERED
— “One who recovers, according to law, possession unjustly lost, shall be deemed for all purposes which may
redound to his benefit, to have enjoyed it without interruption.” (Art. 561).
(f)
POSSESSION DURING INTERVENING PERIOD — “It
is presumed, that the present possessor who was also the
possessor at previous time, has continued to be in possession during the intervening time, unless there is proof to
the contrary.” (Art. 1138[2]).
(g)
POSSESSION OF MOVABLES WITH REAL PROPERTY
— “The possession of real property presumes that of the
movables therein, so long as it is not shown or proved that
they should be excluded.” (Art. 542).
(h)
EXCLUSIVE POSSESSION OF COMMON PROPERTY
— “Each one of the participants of a thing possessed in
common shall be deemed to have exclusively possessed
the part which may be allotted to him upon the division
thereof, for the entire period during which the co-possession lasted.” (Art. 543).
Art. 530. Only things and rights which are susceptible
of being appropriated may be the object of possession.
COMMENT:
(1) What May or May Not Be Possessed?
Only those things and rights which are susceptible of being appropriated (hence, only PROPERTY may be the object
of possession).
474
CIVIL CODE OF THE PHILIPPINES
Art. 530
The following cannot be appropriated and hence cannot
be possessed: property of public dominion, res communes, easements (if discontinuous or non-apparent), things specifically
prohibited by law.
(2) ‘Res Nullius’
Res nullius (abandoned or ownerless property) may be
possessed, but cannot be acquired by prescription. Reason:
prescription presupposes prior ownership in another. However,
said “res nullius” may be acquired by occupation.
475
CIVIL CODE OF THE PHILIPPINES
Chapter 2
ACQUISITION OF POSSESSION
Art. 531. Possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that
it is subject to the action of our will, or by the proper acts
and legal formalities established for acquiring such right.
COMMENT:
(1) How Is Possession Acquired? (BAR)
(a)
By material occupation (detention) of a thing or the exercise of a right (quasi-possession). (This also includes
constitutum possessorium or traditio brevi manu.)
(b)
By subjection to our will (this includes traditio longa
manu — by mere agreement; or by the delivery of keys
— traditio simbolica) (clearly, this does not require actual
physical detention or seizure).
(c)
By constructive possession or proper acts and legal formalities (such as succession, donation, execution of public
instruments; or thru the possession by a sheriff by virtue
of a court order.) (See Muyco v. Montilla, 7 Phil. 498).
[NOTE:
(1)
Constitutum possessorium exists when
a person who possessed property as an
owner, now possesses it in some other
capacity, as that of lessee or depositary.
(2)
Traditio brevi manu — (the opposite of
constitutum possessorium) — this exists
when a person who possessed property not
as an owner (like a lessee), now possesses
it as owner.
476
CIVIL CODE OF THE PHILIPPINES
(3)
Art. 531
Traditio longa manu (delivery by the
long hand) — delivery by consent or mere
pointing. (See 4 Manresa 148-149).].
[NOTE: In the absence of stipulation of the parties that
the ownership of a thing sold shall not pass to the purchaser
until he has fully paid the stipulated price, the execution of
the sale thru a public instrument shall be equivalent to the
delivery of the thing. The fact that the parties have agreed
that the balance shall be paid upon approval of a particular
loan does not evidence a contrary intention. (Tan Boon Diok
v. Aparri Farmer’s Cooperative Association, Inc., L-14154,
June 30, 1960). If, however, notwithstanding the execution of
the instrument, the purchaser CANNOT have the enjoyment
and material tenancy of the thing and make use of it himself,
because such tenancy and enjoyment are opposed by another,
then delivery has NOT been effected. Symbolic delivery holds
true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of
the vendee. (Sarmiento v. Lesaca, L-15385, June 30, 1960).].
Roque v. Lapuz
L-32811, Mar. 31, 1980
If a lot buyer cannot show a deed of conveyance, the probability is that there was no immediate transfer of ownership
intended.
Pio Barretto Sons, Inc. v.
Compania Maritima
L-22358, Jan. 29, 1975
FACTS: Pio Barretto Sons, Inc. sued Compania Maritima
for payment of P6,054.36 with 12% interest, as the price of
lumber allegedly delivered by the former to the latter. To
prove delivery, plaintiff presented counter-receipts issued by
the defendant certifying to the fact that certain statements had
been received from the plaintiff “for the latter’s revision.’’ Is
this sufficient proof of delivery of the lumber?
477
Art. 531
CIVIL CODE OF THE PHILIPPINES
HELD: No, said counter receipts can not mean an admission of having received the lumber, but only an admission of
having received certain statements on claims for lumber allegedly delivered. To rule otherwise would be to say that the
sending of a statement of account would be evidence of the
admission of said statement. Because the plaintiff has failed
to prove delivery, defendant has no duty to pay.
Pamplona v. Moreto
L-33187, Mar. 31, 1980
Property sold by a husband and wife should after their
death be delivered by the children to the buyer — that is, in
case no delivery has yet been made.
(2) Essential Requirements for Possession
(a)
the corpus (or the thing physically detained).
(b)
the animus or intent to possess (whether evidenced expressly or impliedly).
(3) Constructive Possession of Land
If an entire parcel is possessed under claim of ownership,
there is constructive possession of the entire parcel, UNLESS a
portion thereof is adversely possessed by another. (See Ramos
v. Director of Lands, 39 Phil. 175). The area must however be
within reasonable limits — it is not enough to merely plant a
sign. (Lasam v. Director of Lands, 65 Phil. 367).
Asuncion, et al. v. Hon. Plan
GR 52359, Feb. 24, 1981
In an action for partition, defendants agreed to deliver
to plaintiff, 24 hectares of land. Plaintiff’s heirs then executed
lease contracts involving said 24 hectares with certain persons,
not parties in the partition case. When the lessees failed to
pay the rent, the plaintiff’s heirs moved for the issuance of an
alias writ of execution in the partition case, asking in effect
for the delivery to them of the 24 hectares. The motion cannot be granted, for by the execution of the lease contracts, the
478
CIVIL CODE OF THE PHILIPPINES
Art. 532
judgment in the partition case had already been executed. A
new action is needed to oust the lessees, since they were not
parties in the partition case.
Art. 532. Possession may be acquired by the same person
who is to enjoy it, by his legal representative, by his agent,
or by any person without any power whatever; but in the
last case, the possession shall not be considered as acquired
until the person in whose name the act of possession was
executed has ratified the same, without prejudice to the
juridical consequences of negotiorum gestio in a proper case.
COMMENT:
(1) Acquisition of Possession from the Viewpoint of Who
Possesses
(a)
personal
(b)
thru authorized person (agent or legal representative)
(c)
thru UNAUTHORIZED person (but only if subsequently
RATIFIED).
(2) Essential Requisites
(a)
(b)
(c)
for personal acquisition
1)
intent to possess
2)
capacity to possess
3)
object must be capable of being possessed
thru an authorized person
1)
intent to possess for principal (not for agent)
2)
authority or capacity to possess (for another)
3)
principal has intent and capacity to possess
thru an unauthorized person (as in negotiorum gestio)
1)
intent to possess for another (the “principal)
2)
capacity of “principal” to possess
479
Art. 533
CIVIL CODE OF THE PHILIPPINES
3)
ratification by “principal” (The possession although
cured only by the express or implied ratification
should be regarded as having a RETROACTIVE effect.) (See by analogy Art. 1396).
[NOTE: If the stranger (gestor) had possessed
it in his own name, it is he who had possession, and
not the so-called “principal.”].
(3) Negotiorum Gestio
Negotiorum gestio is referred to in Art. 2144, et seq. of the
Civil Code.
Art. 2144. Whoever voluntarily takes charge of the agency
or management of the business or property of another without
any power from the latter, is obliged to continue the same until
the termination of the affair and its incidents, or to require the
person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of
these instances:
(a)
When the property or business is not neglected or
abandoned;
(b)
If in fact the manager has been tacitly authorized
by the owner.
In the first case, the provisions of Articles 1317, 1403, No.
1, and 1404 regarding unauthorized contracts shall govern.
In the second case, the rules on agency in Title X of this
Book shall be applicable.
Art. 533. The possession of hereditary property is deemed
transmitted to the heir without interruption and from the
moment of the death of the decedent, in case the inheritance
is accepted. One who validly renounces an inheritance is
deemed never to have possessed the same.
COMMENT:
(1) Acquisition of Possession thru Succession Mortis Causa
480
CIVIL CODE OF THE PHILIPPINES
Art. 533
Art. 533 speaks of acquisition of possession thru SUCCESSION MORTIS CAUSA.
(2) Time of Acquisition of Possession
(a)
If heir accepts — from the moment of death since there is
no interruption. (Moreover, the possession of the deceased
should be added to the possession of the heir). (Art. 1138,
No. 1).
[It should be understood however that the estate of
the deceased has more assets than liabilities (the inheritance thus consisting of the remaining estate), otherwise
there will be no property to be possessed. (See Centenera
v. Sotto, 44 O.G. 3782).].
(b)
If heir refuses (or is incapacitated to inherit) — he is
deemed NEVER to have possessed the same.
(3) If Heir Accepts
(a)
Example: Father died on June 1, 2003. Son accepted
the inheritance on June 25, 2003. Possession is deemed
transmitted not on June 25 but on June 1, 2003.
(b)
Example: Father before his death possessed in good
faith X’s land for 3 years. Son accepted inheritance, and
believed also in good faith that the father was the owner
of the land. Nine (9) years after the father’s death, the
owner X wants to recover the property from the son. Will
X’s action prosper?
ANS.: No, X’s action will not prosper, because to
the possession of the child (9 years) must be added the
possession of the predecessor, the father (3 years), giving
the son a total of 12 years of uninterrupted possession
— there being a just title (succession) and good faith — 10
years would be enough to give ownership to the son (not
by succession but by prescription).
[NOTE: Art. 1138(1) says “In the computation of
time necessary for prescription, the present possessor may
complete the period necessary for prescription by tacking
481
Art. 533
CIVIL CODE OF THE PHILIPPINES
his possession to that of his grantor or predecessor-in-interest.”].
[NOTE: The example given is good only if the father
and the son are both in GOOD FAITH, or if both are in
BAD FAITH (but in the latter case, the total period must
be 30 years of extra-ordinary prescription). If father was
in bad faith, and son is in good faith, see Art. 534. (infra).].
(c)
Problem:
Father died on June 1, 2003. Son accepted on June
25, 2003. Who was possessor of the property on June 8,
2003?
ANS.: Son, because of the retroactive effect of the
acceptance.
(d)
Problem:
Father died on June 1, 2003. Son accepted on June
25, 2003. For 25 days an administrator had been taking
care of the land and was actually on it. For the period of
25 days, who was the actual possessor, the administrator
or the son?
ANS.: The son was in actual possession (in the concept of owner) thru the administrator. The administrator
was in actual possession (in the concept of holder); and
therefore he was really in actual possession in behalf of
the son.
Consequences:
1)
If an intruder should force entry into the
premises, either the administrator or the son
may institute the action of forcible entry.
2)
For purposes of prescription, the son’s possession is considered uninterrupted.
3)
But if, during the period of 25 days, the son had
forced himself into the premises, the administrator would have had the right to sue him
for forcible entry. (See Padlin v. Humphreys,
482
CIVIL CODE OF THE PHILIPPINES
Art. 533
19 Phil. 254, which held that the owner of the
property himself may be the defendant in a
forcible entry case.)
(e)
Some Decided Cases
1)
If an heir succeeds the deceased by operation of law
in all his rights and obligations by the mere fact of
his death, it is unquestionable that the plaintiff in
fact and in law, succeeded her parents and acquired
the ownership of the land referred to in the said title
by the mere fact of their death. (Lubrico v. Arbado,
12 Phil. 391).
2)
A died. B immediately occupied and possessed the
property left by A. C now alleges that he is the heir
of A, and that he (C) therefore, is entitled to get possession of the property. What should C do?
HELD: C must prove the ownership over the
property by A, his alleged predecessor-in-interest;
otherwise B, the present possessor, has in his favor
the legal presumption that he (B) holds possession
by reason of a sufficient title, and he cannot be
forced to show it. If C can prove A’s right, he will be
considered owner and possessor from the time of A’s
death. (See Bondad v. Bondad, 34 Phil. 232; Cruz v.
Cruz, 37 O.G. 209).
3)
A bought certain property from B. Does A automatically acquire possession over the property bought?
Now suppose A inherited the property from B, would
your answer be the same?
ANS.: In the case of the sale, possession is not
immediately acquired by A, whether or not A pays
the price right away. To acquire possession (and ownership), A must have been the recipient of a delivery
of the thing from B. In the case of the inheritance,
however, the answer is different, for here, even if
there is no delivery right away, still if the inheritance is accepted, the possession of the heir will be
counted from the death of the decedent, by express
provision of the law. Indeed the only direct trans483
Art. 533
CIVIL CODE OF THE PHILIPPINES
mission of possession is that which is brought about
by operation of law upon the death of the deceased.
(Repide v. Astuar, 2 Phil. 757).
(4) If Heir Renounces
(a)
One who validly renounces inheritance is deemed never
to have possessed the same.
(b)
Example:
Father died on Jan. 3, 2004. Son repudiated inheritance on Jan. 18, 2004. Who was the owner on Jan. 15,
2004?
ANS.: If the father left no other heirs, the State is
supposed to have succeeded him, and therefore the State
was the owner and possessor of the property on Jan. 15,
2004. The property here, after its escheat to the government is an example of PATRIMONIAL PROPERTY of the
State.
(c)
A, B, and C inherited in equal parts a piece of land from
their father. Before partition A sold his share to X. The
next day, B repudiated the inheritance. Upon partition,
what share of the land is X entitled to, 1/3 or 1/2?
ANS.: Note that A has sold HIS share to X. Now
then, at the time of sale, A’s share was apparently 1/3
only, but because B had repudiated, it is as if B never
inherited, hence there were really only two heirs (A and
C). Therefore, A’s share was really one half 1/2) since the
repudiation by B has a retroactive effect. Therefore X is
entitled to 1/2 (which was REALLY A’s share), at the moment of the father’s death.
(5) Case
Herodotus P. Acebedo v. Hon. Bernardo P.
Abesamis, et al.
GR 102380, Jan. 18, 1993
The right of an heir to dispose of the decedent’s property,
even if the same is under administration, is based on Art. 533
484
CIVIL CODE OF THE PHILIPPINES
Art. 534
of the Civil Code stating that the possession of hereditary
property is deemed transmitted to the heir without interruption
and from the moment of the death of the decedent, in case the
inheritance is accepted. Where there are however, two or more
heirs, the whole estate of the decedent is, before its partition,
owned in common by such heirs.
The Civil Code (Art. 493) under the provision on co-ownership, further qualifies this right. Although it is mandated that
each co-owner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and thus may alienate, assign or mortgage it, and even substitute another person in
its enjoyment, the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of
the co-ownership. In other words, the law does not prohibit a
co-owner from selling, alienating or mortgaging his ideal share
in the property held in common.
As early as 1942, this Court has recognized said right of
an heir to dispose of property under administration. In the case
of Teves de Jakosalem vs. Rafols, et al. (73 Phil. 628), it was
said that the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in
no wise, stands in the way of such administration. The Court
then relied on the provision of the Old Civil Code, Article 440
and Article 399 which are still in force as Article 533 and Article 493, respectively, in the new Civil Code. The Court also
cited the words of a noted civilist, Manresa: “Upon the death
of a person, each of his heirs becomes the undivided owner of
the whole estate left with respect to the part or portion which
might be adjudicated to him, a community of ownership being
thus formed among the co-owners of the estate which remains
undivided.’’
Art. 534. One who succeeds by hereditary title shall not
suffer the consequences of the wrongful possession of the
decedent, if it is not shown that he was aware of the flaws affecting it; but the effects of possession in good faith shall not
benefit him except from the date of death of the decedent.
485
Art. 534
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Some Effects of Acquisition of Possession, thru Succession
If the father or decedent was in bad faith, it does not
necessarily mean that the son was also in bad faith. The son
is presumed to be in GOOD FAITH. (Arriola v. De la Serna,
14 Phil. 627). However, since the father was in BAD FAITH,
the consequences of the GOOD FAITH of the son should be
counted only from the date of the decedent’s death.
[NOTE: The use of the words “suffer” and “wrongful possession.” Note also that if the father had been in GOOD FAITH,
the article is not applicable, for the son would not ‘‘suffer.” In
such a case, the possession of the father in GOOD FAITH is
added to the possession of the son in GOOD FAITH, and we
cannot say that the effects of possession in good faith shall
commence only from the decedent’s death. (See also discussion
under the preceding article — Art. 533).].
(2) Example
Father possessed in bad faith, X’s land for 3 years, after
which the property was presumably inherited by M, the father’s
son. M was in good faith. For how many years more, from the
father’s death, should M possess the land in order to become
its owner?
ANS.: For 9 years, since the effects of his possession in
good faith should begin only from the decedent’s death. [NOTE:
Because extraordinary prescription requires 30 years, and ordinary prescription requires 10 years, it follows that 3 years
possession in BAD FAITH should be equivalent to 1 year possession in GOOD FAITH. Hence, applying Art. 1138(1), 1 year
plus 9 years equals 10 years.].
(3) Query
In the example given above, if X within 4 years brings an
action to recover the property and its fruits, should X’s action
prosper?
486
CIVIL CODE OF THE PHILIPPINES
Art. 535
ANS.: Regarding the land — yes, because M has not yet
become the owner. Regarding the fruits —
(a)
M does not have to reimburse the value of the fruits for
the 4-year period he was in possession, since he is a possessor in good faith.
(b)
But, if M obtained any cash or benefit from the fruits
harvested by his father, said value must be returned (minus necessary expenses for cultivation, gathering, and
harvesting) because the father was in bad faith, and the
effects of M’s good faith, it must be remembered, should
only commence from the father’s death.
Art. 535. Minors and incapacitated persons may acquire
the possession of things; but they need the assistance of their
legal representatives in order to exercise the rights which
from the possession arise in their favor.
COMMENT:
(1) Acquisition of Possession by Minors and Incapacitated
Persons
Example:
A minor may acquire the possession of a fountain pen
donated to him, but in case of a court action regarding ownership over the pen, his parents or legal representatives must
intervene.
(2) Persons Referred to in the Article
(a)
unemancipated minors
(b)
minors emancipated by parental concession or by marriage
(in certain cases, like possession of real property)
(c)
other incapacitated persons like
1)
the insane
2)
the prodigal or spendthrift
3)
those under civil interdiction
487
Art. 536
CIVIL CODE OF THE PHILIPPINES
4)
deaf-mutes (in certain cases) — (in general, those
laboring under restrictions on capacity to act). (See
Arts. 38 and 39; 4 Manresa, pp. 190-191).
(3) Nature of their Possession
Regarding “acquisition of possession,” it is clear that possession by them is allowed only in those matters where they
have capacity to act (as in the case of physical seizure of res
nullius or donation of personal property simultaneously delivered to them) and NOT possession where juridical acts are
imperative like the possession of land the ownership of which
he desires to test in court (See 2 Castan 45-46 citing Morrell;
see also 4 Manresa 189), for in such a case, and in similar ones,
the intervention of the legal representatives or guardians is
needed. (See 3 Sanchez Roman 451).
(4) Acquisition by Prescription
Minors and other incapacitated persons may acquire property or rights by prescription, either personally or thru their
parents, guardians, or legal representatives. (Art. 1107).
Art. 536. In no case may possession be acquired through
force or intimidation as long as there is a possessor who
objects thereto. He who believes that he has an action or
a right to deprive another of the holding of a thing, must
invoke the aid of the competent court, if the holder should
refuse to deliver the thing.
COMMENT:
(1) Modes Thru Which Possession Cannot Be Acquired
(Force, Tolerance, Secrecy)
Possession cannot be acquired:
(a)
thru FORCE or INTIMIDATION (as long as there is a
possessor who objects thereto). (Impliedly, if at first there
was objection but later on such objection ceases, the possession begun by force or intimidation may be acquired.
488
CIVIL CODE OF THE PHILIPPINES
Art. 537
Objection may be made by suit of forcible entry within a
year from the dispossession, otherwise, the possession de
facto is lost.)
(b)
thru mere TOLERANCE (permission). (Example: If I
willingly permit X to occupy my land, that is not really
his possession, for the possession continues to be mine.)
Mere inaction or mere failure to bring an action is NOT
the tolerance referred to in the law.) (See Art. 537; see
also Manresa).
(c)
thru clandestine, secret possession (or possession without
knowledge — for this would be possession by stealth, and
not open or public. (See Art. 537). Clandestine possession
by itself is hidden or disguised possession and may be
with or without the owner’s knowledge.
(2) How to Recover Possession
If a person has been deprived of possession, he cannot
take the law into his own hands. First, he should request the
usurper to give up the thing and if the latter refuses, the former
should invoke the aid of the proper and competent court (that
which has jurisdiction over the subject matter and the parties).
(Repide v. Astuar, 2 Phil. 757; 4 Manresa 167; Bishop of Cebu
v. Mangaron, 6 Phil. 286). Otherwise, the owner can be made
the defendant in a forcible entry case with all its repercussions.
(See Santiago v. Cruz, 54 Phil. 640).
[NOTE: An action of forcible entry or unlawful detainer
may be brought even against the owner. (See also Mañalac v.
Olegario, {CA} 43 O.G. 2166).].
Art. 537. Acts merely tolerated, and those executed clandestinely and without the knowledge of the possessor of a
thing, or by violence, do not affect possession.
COMMENT:
(1) Acts of Tolerance or Secrecy
(a)
See also the discussion under the preceding article.
489
Art. 537
(b)
CIVIL CODE OF THE PHILIPPINES
As has already been said, “tolerance” is permission, as
distinguished from abandonment. If an owner abandons,
as when within the proper period for prescription, he
brings no action, the possession of another will ripen
into ownership. As a matter of fact, silence or inaction
is NEGLIGENCE, not tolerance. But where a person
occupies another’s land with the latter’s permission (or
tolerance), the occupier, no matter how long he may
remain, can never acquire ownership, because he never
had possession. Whether there was permission, or there
has been an abandonment, is a question of fact. (See 4
Manresa 196-197). Of course, it is possible that although
there was permission at first, the permission was subsequently withdrawn, and abandonment has resulted. But
this must be proved by clear and convincing evidence.
(2) Cases and Doctrines on Tolerance
Vda. de Catchuela v. Francisco
L-31985, June 25, 1980
If a person squats on another’s property because of “tolerance,” the latter may sue for ejectment.
Ayala de Roxas v. Maglonso
8 Phil. 745
FACTS: A owned a parcel of land, which was occupied by
B and C. A tolerated their presence, and did not compel them
to pay rentals. In 1901, a land tax was imposed, and A asked
them to pay rentals. They promised to do so, and recognized
A’s ownership over the land, but did not really pay said rentals. After a period of years, B and C now claim that they have
acquired said land by prescription. Are they right?
HELD: No, since their stay was merely by tolerance, and
having recognized ownership in another, they cannot now claim
that their possession was adverse.
490
CIVIL CODE OF THE PHILIPPINES
Art. 537
Cuaycong v. Benedicto
37 Phil. 781
FACTS: A land owner for sometime permitted his neighbors and the general public to cross his property. This went
on for a long time. ISSUE: Has the easement of right of way
been acquired in this case?
HELD: No, in view of the fact that possession by mere tolerance, no matter how long continued, does not start the running
of the period of prescription. (Incidentally, even if there had
been no tolerance, the easement of right of way can never be
acquired by prescription, for said easement is discontinuous.
(See Ronquillo, et al. v. Roco, et al., L-10619, Feb. 28, 1958; see
also Art. 620).
Director of Lands v. Roman Catholic Bishop
61 Phil. 644
Land belonging to the Roman Catholic Church was occupied by a municipality, which erected thereon a Rizal monument, but which could present no other proof of ownership.
That there was mere tolerance and permission on the part of
the church was the conclusion the Court reached, resulting in
the decision denying title to the municipality. (See also Bishop
of Lipa v. Mun. of San Jose, 27 Phil. 271).
(3) Possession by a Squatter
A squatter’s possession, when there is no violence, is by
mere tolerance. The one-year period for filing an unlawful detainer case against him should be counted not from the beginning of the possession, but from the time the latest demand to
vacate is made, unless in the meantime an accion publiciana is
instituted. (Calubayan v. Pascual, L-22645, Sep. 18, 1967).
People v. City Court,
Br. III, Gen. Santos City
208 SCRA 8
(1992)
Squatting is a continuing offense.
NOTA BENE: Squatting has been decriminalized.
491
Art. 537
CIVIL CODE OF THE PHILIPPINES
Galang v. CA
245 SCRA 629
(1995)
The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. At best, it may mitigate the penalty but it certainly will
not condone the offense. For social justice cannot condone the
violation of the law nor does it consider that very wrong to be a
justification for priority in the enjoyment of a right.
(4) Clandestine Possession
Clandestine possession is secret possession, or possession
by stealth. For clandestine possession to affect the owner’s possession, the possession must also be unknown to the owner. If
it is secret to many, but known to the owner, his possession
is affected. (4 Manresa 199). There is a presumption however
that when possession is clandestine, it is also unknown to the
owner.
(5) Possession by Force or Violence
(a)
Force may be proved expressly or by implication. “The
act of entering into the premises and excluding the lawful possessor therefrom necessarily implies the exertion
of force over the property.’’ (Mañalac v. Olegario, et al.,
[CA] 43 O.G. 2169).
(b)
The force may be:
1)
actual or merely threatened;
2)
done by possessor himself or by his agent;
3)
done against the owner or against any other possessor (See 4 Manresa 200-201) or against the owner’s
representative, such as a capataz (Mediran v. Villanueva, 37 Phil. 752);
4)
done to oust possessor; or if occupied during the latter’s absence, done to prevent his getting back the
premises. (See Bishop of Lipa v. Municipality of San
Jose, 27 Phil. 571).
492
CIVIL CODE OF THE PHILIPPINES
Art. 538
(6) Meaning of “Acts ... do not affect possession” (Art. 537)
(a)
The intruder does not acquire any right to possession (NO
LEGAL POSSESSION).
(b)
The legal possessor, even if physically ousted, is still the
possessor and therefore —
(c)
1)
still entitled to the benefits of prescription;
2)
still entitled to the fruits;
3)
still entitled as possessor for all purposes favorable
to his possession. (See Ayala de Roxas v. Maglonso,
8 Phil. 745; 4 Manresa 201-202).
The intruder cannot acquire the property by prescription. (See Ayala de Roxas v. Maglonso, supra; Cuaycong
v. Benedicto, 37 Phil. 781).
(7) Old and New Laws Compared
(a)
Under the old law, the Code of Civil Procedure, prescription was possible even if entry into the premises was
effected thru violence, for the law said “in whatever way
such occupancy may have commenced or continued.” (Sec.
41, Act 190, Civil Code).
(b)
Under the new Civil Code, “possession (for prescription)
has to be in the concept of an owner, public, PEACEFUL
and uninterrupted.” (Art. 1118). The reason for “peaceful” is that “violence or downright usurpation must be
condemned.” (Report of the Code Commission, p. 129).
Art. 538. Possession as a fact cannot be recognized at the
same time in two different personalities except in the case of
co-possession. Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there
are two possessors, the one longer in possession; if the dates
of the possession are the same, the one who presents a title;
and if all these conditions are equal, the thing shall be placed
in judicial deposit pending determination of its possession or
ownership through proper proceedings.
493
Art. 538
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) General Rule Regarding Possession as a Fact
Possession as a fact cannot be recognized at the same time
in two different personalities.
Exceptions to General Rule:
(a)
co-possessors (since here, there is no conflict of interest, both of them acting as co-owners, as in the case
of property owned or possessed in common)
(b)
possession in different concepts or different degrees
(Example: Both owner and tenant are possessors as a fact at the same time; the first, in the concept of owner; the second, in the concept of holder;
other examples: principal and agent; depositor and
depositary; owner and administrator.)
(2) Rules or Criteria to be Used in Case of Conflict or Dispute Regarding Possession (BAR)
(a)
present possessor shall be preferred
(b)
if both are present, the one longer in possession
(c)
if both began to possess at the same time, the one who
present (or has) a title
(d)
if both present a title, the Court will determine. (Meantime, the thing shall be judicially deposited.)
(3) Example
(a)
While I was vacationing in Europe, someone occupied my
city lot, and when I returned, he repelled me by force.
Who is the possessor as a fact of my property?
ANS.: Although apparently the intruder is the
present possessor, he actually cannot be said to be in possession since he is possessing it by force. (Arts. 536, 537;
See Bishop of Lipa v. Municipality of San Jose, 27 Phil.
571). Therefore, since I am the present possessor, and
the intruder is NOT in possession, I will be considered
494
CIVIL CODE OF THE PHILIPPINES
Art. 538
the actual possessor and my right is preferred. (See also
Veloso v. Naguit, 3 Phil. 604).
(b)
A began to possess a parcel of land in 2003; B began to
do the same in 2007 and both are actually there. Whose
possession will be recognized?
ANS.: A’s possession as a fact will be recognized since
his possession is longer. (Art. 538; 4 Manresa 205).
[NOTE: The law does not say there cannot be two
or more possessors as a matter of fact (actual possessors).
There can indeed be, as in the example above given. BUT
the law does not recognize that there should be, from the
legal viewpoint, two actual possessors (save in the case of
the exception already discussed). Only one of two actual
possessors will be recognized in law, as the actual possessor. (See 4 Manresa 204-205).].
(c)
On March 15, 2007, both A and B, at exactly the same
hour, began to possess my land, A without any right
whatsoever, B as my tenant or because he purchased the
land from me. Who should be preferred?
ANS.: B, because he has a title (either the lease right
or the purchase from me).
[NOTE: What does the word “title’’ in the article
mean, a right as by purchase, or the document evidencing the right? Manresa is of the opinion that it means
the “document, for it must be presented”; and that the
document may be either a private or a public one. (See
4 Manresa 206). It is submitted, however, that the word
“presents” can also mean “has” and therefore title means
EITHER a right, or the document evidencing the right.
Thus, in the problem presented, B should be preferred
even if the lease contract or the deed of sale had been lost
or destroyed. Note also the use of the word “presents” in
Art. 1544.].
(d)
Suppose both possessors who began possessing at the same
time could present a title, who should be preferred?
ANS.: Manresa says that the person with the older
title must be preferred and therefore, there need not be
495
Art. 538
CIVIL CODE OF THE PHILIPPINES
any judicial deposit. (See 4 Manresa 206-207). But the law
says that if both can present a title, the court should make
the determination thru the proper proceedings, and in the
meantime, the object shall be placed in judicial deposit.
(Art. 538).
[NOTE: A judicial deposit or sequestration takes
place when an attachment or seizure of property in litigation is ordered. (Art. 2005). Movable as well as immovable
property may be the object of sequestration. (Art. 2006).
The depositary of property or objects sequestered cannot
be relieved of his responsibility until the controversy
which gave rise thereto has come to an end, unless the
court so orders. (Art. 2007). The depositary of property
sequestered is bound to comply with respect to the same,
with all the obligations of a good father of a family. (Art.
2008). As to matters not provided for in this Code, judicial
sequestration shall be governed by the Rules of Court.
(Art. 2009).].
(4) When the Article Applies
Art. 538 applies to preference of POSSESSION (whether
real or personal property is involved). It also applies whether
the possession was longer or shorter than one year). (See 4
Manresa 207-208).
(5) Preference of Ownership (not Possession)
Art. 1544 applies to preference of OWNERSHIP in case of
DOUBLE SALE (Art. 1544) or a DOUBLE DONATION. (Art.
744).
(a)
MOVABLE property —
Preference in ownership is given to the person
who first possessed it in good faith. (Art. 1544, par.
1).
(b)
IMMOVABLE property —
Preference in ownership is given
1)
to the first who registered his right in good faith
in the Registry of Property.
496
CIVIL CODE OF THE PHILIPPINES
Art. 538
2)
if there was no registration, to the person who
first possessed in good faith.
3)
if there was no possession, to the person who
presents the oldest title, provided that the title
had been acquired in good faith.
(6) Cases Illustrative of Art. 1544 (Double Sale)
Po Sun Tun v. Price
54 Phil. 192
FACTS: A sold and delivered his land to B. Later, A sold
the same land to C. But C, not knowing that B had previously
bought the land, registered said land in his (C’s) name. Who
should be considered the owner?
HELD: C should be considered the owner since he was
the first one to register the land, and he was in good faith.
[NOTE: But is it not true that one cannot sell what he does
not own anymore?
ANS.: Yes, but Art. 1544 precisely constitutes the exception to the aforementioned rule. Art. 1544 is based on public
convenience. Moreover, since B’s right is not registered, it does
not bind innocent third persons, as to whom A is still the owner.
(See Hernandez v. Katigbak Vda. de Salas, 69 Phil. 744 stating
that the contrary doctrine in Lanci v. Yangco, 52 Phil. 563 has
been abandoned.) There is no doubt however that for breach of
the warranty against eviction, A should indemnify B.].
Victoriano Hernandez v. Macaria Katigbak
Vda. de Salas
69 Phil. 744
FACTS: Leuterio sold in 1922 a parcel of registered land
(with a Torrens Title) to Villanueva. The deed of sale was
however never registered. In 1926, a creditor of Leuterio named
Salas Rodriguez sued Leuterio for recovery of the debt, and a
writ of execution was levied on Leuterio’s land (the same lot
497
Art. 538
CIVIL CODE OF THE PHILIPPINES
that had been sold to Villanueva). Salas Rodriguez did not know
of this sale. Upon the other hand, the levy on execution was
duly registered. One month after this registration of the levy,
Villanueva filed a third party claim. The very next day, the
execution sale was made and Salas Rodriguez was the highest
bidder. Issue: Who should be considered the owner of the land
— Salas Rodriguez or Villanueva?
HELD: Salas Rodriguez should be considered as the owner
because of the following reasons:
(a)
It is a well-settled rule that, when property sold on execution is registered under the Torrens system, registration
is the operative act that gives validity to the transfer or
creates a lien on the land, and a purchaser on execution
sale is not required to go behind the registry to determine
the conditions of the property. Such purchaser acquires
such right, title, and interest as appear on the certificate of title issued on the property subject to no liens,
encumbrances or burdens that are not noted thereon. Be
it observed that Villanueva’s right was never registered
nor annotated on the Torrens Certificate.
(b)
The doctrine in Lanci v. Yangco (52 Phil. 563), which purports to give effect to all liens and encumbrances existing
prior to the execution sale of a property registered under
the Torrens System, even if such liens and encumbrances
are not noted in the Certificate of Title (on the theory
that if for example a previous sale had been made by the
registered owner, he can no longer convey what he does
not have) has long been ABANDONED by the Supreme
Court. (See Philippine National Bank v. Camus, L-46870,
June 27, 1940).
(c)
The only exception to the rule enunciated in (a) is where
the purchaser had knowledge, prior to or at the time of
the levy, of such previous lien or encumbrance. In such
case, his knowledge is equivalent to registration, and
taints his purchase with bad faith. (Gustilo v. Maravilla,
48 Phil. 442; La Urbana v. Bernardo, 62 Phil. 790; 23
C.J. Sec. 812; Parsons Hardware Co. v. Court of Appeals,
498
CIVIL CODE OF THE PHILIPPINES
Art. 538
L-46141). But if knowledge of any lien or encumbrance
upon the property is acquired after the levy, the purchaser
cannot be said to have acted in bad faith in making the
purchase; such lien or encumbrance cannot therefore affect his title.
(d)
In the present case, the third-party claim was filed one
month after the levy was recorded. The validity of the
levy is thus unaffected by any subsequent knowledge
which the judgment creditor might have derived from the
third-party claim. The fact that this third-party claim was
presented one day before the execution sale is immaterial.
If the levy is valid, as it was, the execution sale made in
pursuance thereof is also valid, just as a mortgage lien
validly constituted may validly be foreclosed regardless of
any equities that may have arisen after its constitution.
Compuesto v. Sales
39 O.G. 47, p. 1183
FACTS: A sold real property first to B who took possession
of it, and then to C. C knew of the previous sale to B, nevertheless, he (C) registered it in his own name. Later, B registered
the property. Who is the owner?
HELD: B is the owner since the registration and purchase
by C had been made in bad faith.
Bernas v. Balo
(CA) GR 650, May 14, 1948
FACTS: A sold the same land to B in a private document
(1929), and later to C in a public document (1939). Although
C knew of the previous sale of the land to B, he (C) nevertheless registered the land in his name. The lower court rendered
judgment in favor of C on the ground that B’s document, being
private, was not and cannot be registered. B appealed the case.
Decide.
HELD: B should be considered the owner. Reason: C’s
registration was made in bad faith, therefore, his registration
cannot affect B’s right.
499
Art. 538
CIVIL CODE OF THE PHILIPPINES
Arcenas v. del Rosario
38. O.G. 3693
(reiterating Tuason v. Raymundo, 28 Phil. 635)
The purchaser must not only register in good faith if he
wants to avail himself of Art. 1544. He must also have given a
valuable consideration for the land. [Hence, it follows also that
if the sale is fictitious, the Article cannot apply. (See Cruzado
v. Bustos and Escaler, 34 Phil. 17).].
Emas v. De Zuzuarregui and Aguilar
53 Phil. 197
A person who presents for registration a forged document
of sale, knowing it to be forged, cannot be said to be in good
faith.
[QUERY: Suppose he did not know that it was a forgery,
would Art. 1544 still apply?
ANS.: Although this time he is in good faith, still Art.
1544 cannot apply since it was not purchased from the owner
of the land or at least from the original owner who had made
a double sale of it.].
Salvoro v. Tañega
L-32988, Dec. 29, 1978
As between a buyer of a parcel of land who first takes
possession of it and a subsequent buyer who registers the sale
in his name, despite knowledge of the first sale, the former
is preferred, because the registration of the latter is in bad
faith.
(7) Problem if There are Two Sellers
A sold his land to B who began to possess it. C, a stranger,
sold the same land, unauthorized by anyone, and in his (C’s)
own name to D, who registered the same in good faith. Who is
the owner, B or D?
HELD: B should be considered as the owner even if he did
not register the land, because D, who registered the same, did
500
CIVIL CODE OF THE PHILIPPINES
Art. 538
not buy the land from its lawful owner, but from a complete
stranger totally unconnected with the land. Art. 1544 cannot
therefore apply, for it cannot be said that it had been sold twice
by the same person.
Carpio v. Exenea
38 O.G. 65, p. 1336
FACTS: A sold his land to B. Later, A sold the same land
to C. B in turn sold the same to D, who took possession of the
land. C, a purchaser in good faith, registered the land in his
name. Who is the owner now, C or D?
HELD: D is the owner. It is true that C was in good faith,
and it is also true that C was the first one to register the land,
but Art. 1544 can be applied only if the 2 buyers (C and D) had
bought the same property from the same person (or at least
from another in representation of the same seller). Art. 1544
indeed does not apply if there are two different sellers, one of
whom, when he made the conveyance, had long before disposed
of his rights as owner of the same.
Adalin v. CA
88 SCAD 55
(1997)
It cannot be denied that Palanca and the said tenants, in
the instant case, entered into the subsequent or second sale
notwithstanding their full knowledge of the subsistence of the
earlier sale over the same property to private respondents Yu
and Lim.
Though the second sale to said tenants was registered,
such prior registration cannot erase the gross bad faith that
characterized such second sale, and consequently, there is no
legal basis to rule that such second sale prevails over the first
sale of the said property to private respondents Yu and Lim.
(8) Query
On Jan. 30, 2003, A who owns a piece of agricultural land,
gave a general power of attorney to B. On Feb. 20, 2003, A with501
Art. 538
CIVIL CODE OF THE PHILIPPINES
out the knowledge of B executed in favor of C a special power of
attorney to sell said piece of land. On February 25, 2003, B as
attorney-in-fact of A executed a deed of sale in favor of D. On
the same date, February 25, 2003, C under the special power
given by A, sold the same piece of land to E.
Assuming that the vendees have not yet registered their
respective documents nor have taken possession of the land,
which of the two sales is valid and enforceable, and who is
responsible for damages, if any? Reasons.
[NOTE: The reader will please answer this question himself. Hint: What is the difference between a general and a special
power of attorney?].
(9) Another Query
A sold a parcel of land with a Torrens Title to B on January 5. A week later, A sold the same land to C. Neither sale
was registered. As soon as B learned of the sale in favor of C,
he (B) registered an adverse claim stating that he was making
the claim because the second sale was in fraud of his rights as
first buyer. Later, C registered the deed of sale that had been
made in his favor. Who is now the owner — B or C?
ANS.: C is clearly the owner, although he was the second
buyer. This is so, not because of the registration of the sale
itself, but because of the AUTOMATIC registration in his favor
caused by B’s knowledge of the first sale (actual knowledge being equivalent to registration). The purpose of registration is
to notify. This notification was done because of B’s knowledge.
It is wrong to assert that B was only trying to protect his right
— for there was no more right to be protected. He should have
registered the sale BEFORE knowledge came to him. It is now
too late. It is clear from this that with respect to the principle
“actual knowledge is equivalent to registration of the sale about
which knowledge has been obtained” — the knowledge may be
that of either the FIRST or the SECOND buyer.
[NOTE: The answer just given is CORRECT. However
in Carbonell v. Court of Appeals, L-29972, Jan. 26, 1976, the
Supreme Court ruled otherwise.].
502
CIVIL CODE OF THE PHILIPPINES
Art. 538
Carbonell v. Court of Appeals
L-29972, Jan. 26, 1976
FACTS: A lot owner agreed to sell his lot to Rosario Carbonell, who then paid the arrears on the mortgage burdening
the lot. Both then stipulated in a document that the “seller’’
could use the lot for one year without paying any rental
thereon. Later, he sold the same lot to Emma Infante. When
Carbonell subsequently asked him to execute the formal deed
of sale, he refused stating he could not do so because he had
already sold the same lot to Infante. What Carbonell did was
to register her adverse claim in the Registry of Property. Four
days later, Infante registered the sale that had been made in
her favor. ISSUE: Who owns the lot — Carbonell, the first
buyer, or Infante, the second buyer?
HELD: Carbonell should be considered as the owner
because it was she who first registered the sale in good faith
(Art. 1544). Infante’s registration four days later was a registration in bad faith. Justice Claudio Teehankee in his concurring
opinion stated that Carbonell’s actual knowledge of the second
sale did not put her in bad faith (but the good Justice failed to
mention why). Her registration being in good faith and prior to
Infante’s registration makes her the owner of the lot. Justice
Cecilia Muñoz-Palma, citing Paras’ Civil Code Annotated, dissented, stating that Carbonell’s actual knowledge is equivalent
to registration of Infante’s purchase, and so it is as if Infante
was the first registrant in good faith, and Carbonell’s later
registration of her own adverse claim may be said to have been
done in bad faith.
COROLLARY ISSUE: Infante, during the 20 years she
occupied the property had made certain improvements thereon
such as filling up the land with garden soil, and constructing
a house and a gate. What are Infante’s rights to the same?
HELD: Infante, being a possessor in bad faith has no right
to be refunded or to retain the useful improvements (useful
because they certainly increase the value of the lot). However,
Infante can remove the improvements, unless Carbonell prefers
to pay Infante their value (not the current high value but the
value at the time said improvements were introduced.)
503
Art. 538
CIVIL CODE OF THE PHILIPPINES
(10) Conflict Between a Sale and a Mortgage
Maria Bautista Vda. de Reyes v. Martin de Leon
L-22331, June 6, 1967
ISSUE: Between an unrecorded sale of prior date of real
property by virtue of a public instrument and a recorded mortgage thereof at a later date, which is preferred?
HELD: The former (the unrecorded sale) is preferred
for the reason that if the original owner had parted with his
ownership of the thing sold, he no longer had the ownership
and free disposal of that thing so as to be able to mortgage it.
Thus, registration of the mortgage under Act 3344 would, in
such case, be of no moment, since it is understood to be without
prejudice to the better right of third parties. Nor would it avail
the mortgagee any to assert that he is in actual possession of
the property for the execution of the conveyance in a public
instrument earlier was equivalent to the delivery of the thing
sold to the vendee. [NOTE: It would seem that this ruling is not
accurate because the mortgagor should really still be considered
the owner insofar as innocent third parties are concerned, the
sale not having been registered. This comment however holds
true only if somehow the land — even if not registered under
the Torrens System was in the name of the mortgagor — as
when for instance he had previously registered his purchase
of it from someone.].
Lapat v. Rosario
110 SCAD 896, 312 SCRA 539
(1999)
A contract should be construed as a mortgage or a loan
instead of a pacto de retro sale when its terms are ambiguous
or the circumstances surrounding its execution or its performance are incompatible or inconsistent with a sale.
Ching Sen Ben v. CA
112 SCAD 678, 314 SCRA 762
(1999)
In case of doubt, a contract purporting to be a sale with
right to repurchase should be considered an equitable mort504
CIVIL CODE OF THE PHILIPPINES
Art. 538
gage. Thus, in a contract of mortgage, the mortgagor merely
subjects the property to a lien, but the ownership and possession thereof are retained by him.
(11) Co-Possession
Concha, et al. v. Hon. Divinagracia
L-27042, Sep. 30, 1981
Co-possessors of a parcel of land that is mortgaged must
be made parties to foreclosure proceedings, otherwise they
cannot be deprived of possession of that portion of the land
actually possessed by them.
505
CIVIL CODE OF THE PHILIPPINES
Chapter 3
EFFECTS OF POSSESSION
Art. 539. Every possessor has a right to be respected in
his possession; and should he be disturbed therein he shall
be protected in or restored to said possession by the means
established by the laws and the Rules of Court.
A possessor deprived of his possession through forcible
entry may within ten days from the filing of the complaint
present a motion to secure from the competent court, in the
action for forcible entry, a writ of preliminary mandatory
injunction to restore him in his possession. The court shall
decide the motion within thirty (30) days from the filing
thereof.
COMMENT:
(1) Right to be Respected in Possession — General Nature
This article speaks of three important things:
(a)
right of a person to be respected in his possession (first
effect of possession).
(b)
protection in said right or restoration to said possession
thru legal means. [See discussion under Art. 428 which
speaks of the right of an owner (and also a possessor)
to recover the property from whoever is holding the
same.].
(c)
the writ of preliminary mandatory injunction.
[NOTE: An adverse possession of property by another
is not an encumbrance in law, and does not contradict
the condition that the property be free from encumbrance. Likewise, the adverse possession is not a lien for
a lien signifies a security for a claim. (Ozaeta v. Palanca,
L-17455, Aug. 31, 1964).].
506
CIVIL CODE OF THE PHILIPPINES
Art. 539
Villanueva, et al. v. Court of Appeals, et al.
L-37653, June 28, 1974
FACTS: Villanueva and 47 others sued in the Court of
Agrarian Relations their alleged landowner Carmen Egido Sala,
whom they said was threatening to eject them from a portion
of the hacienda of which they were tenants. To prevent their
ouster, they asked for a restraining order pendente lite. This
restraining order was granted. ISSUE: Should this order be
allowed to continue?
HELD: Affording tenants a greater leverage, particularly
in the area of security, is a fundamental governmental policy.
Presidential Decree 27 proclaimed the emancipation as
of Oct. 21, 1972 of all tenant farmers of private agricultural
lands devoted to rice and corn.
Presidential Decree 316 supplements PD 27 by prohibiting
the ejectment of said tenants until the respective rights of the
tenant and the landowner are determined in accordance with
the rules and regulations implementing PD 27.
In the light of the foregoing, the restraining order should
be allowed to continue.
Wenceslao O. Valera v. Benjamin Belarmino
Adm. Matter P-159 Feb. 21, 1975
If a defeated defendant in a land case refuses to vacate
the premises and to demolish his constructions thereon, the
judge is justified in ordering the arrest of any person who may
continue to defy his orders. Thus, an order to put the winner
in possession of the properties covered by the writ of execution
and demolition “and to arrest any and all persons who may
resist, defy, and prevent the implementation of the writ ...”
can be allowed.
Derecho v. Abiera
L-26697, July 31, 1970
When the factual existence of a leasehold tenancy relation
between the parties is raised, in an ejectment case, which if
true, would vest original and exclusive jurisdiction over the case
507
Art. 539
CIVIL CODE OF THE PHILIPPINES
in the Court of Agrarian Relations and not in the municipal
court, it is essential that the CFI (now RTC) hold a preliminary
hearing and receive the evidence solely on the facts that would
show or disprove the existence of the alleged leasehold tenancy.
A summary of the facts upholding or denying such jurisdiction
must then be made.
(2) Specific Right to be Respected in Possession
(a)
(b)
Reasons for Protection of Possession:
1)
Possession is very similar to ownership, and as a
matter of fact modifies ownership.
2)
Possession almost invariably gives rise to the presumption that the possessor is the owner. (4 Manresa
214).
“Every possessor’’ is protected under Art. 539, whether
in the concept of owner or in the concept of holder. (See 4
Manresa 214).
Philippine Trust Co. v. CA
117 SCAD 366, 320 SCRA 719
(1999)
The phrase “every possessor’’ in Art. 539 indicates
that all kinds of possession, from that of the owner to
that of a mere holder, except that which constitutes a
crime, should be respected and protected by the means
established by law and the rules of procedure.
(c)
Even in cases admittedly involving public lands, the courts
of justice may decree the restoration of its possession to
one who has been illegally divested thereof, or is being
unlawfully deprived of his right to such possession. (Lopez
v. Santiago, L-14889, Apr. 25, 1960; Kimpo v. Tabanar,
et al., L-16476, Oct. 31, 1961).
(d)
The doctrine of exhaustion of administrative remedies is
inapplicable to a party who claims the disputed land as his
OWN PRIVATE property. (Baladjay v. Castrillo, L-14756,
Apr. 26, 1960; Guekeko v. Araneta, L-10182, Dec. 24, 1957;
Kimpo v. Tabanar, et al., L-16476, Oct. 31, 1961).
508
CIVIL CODE OF THE PHILIPPINES
(e)
Art. 539
Decided Cases
City of Manila v. Gerardo Garcia, et al.
L-26053, Feb. 21, 1967
FACTS: The City of Manila is the owner of parcels of land
forming one compact area in Malate, Manila. Shortly after liberation, several persons entered upon these premises without
the City’s knowledge and consent, built houses of second class
materials, and continued to live there till action was instituted
against them. In 1947, the presence of the squatters having
been discovered, they were given by then Mayor Valeriano
Fugoso written permits each labelled a “lease contract.” For
their occupancy, they were charged nominal rentals. In 1961,
the premises were needed by the City to expand the Epifanio
de los Santos Elementary School. When after due notice, the
squatters refused to vacate, this suit was instituted to recover
possession. Defense was that they were “tenants.”
HELD: They are squatters, not tenants. The mayor cannot legalize forcible entry into public property by the simple
expedient of giving permits, or for that matter, executing
leases. Squatting is unlawful and the grant of the permits
fosters moral decadence. The houses are public nuisance per
se and they can be summarily abated, even without the aid of
the courts. The squatters can therefore be ousted.
Bañez v. Court of Appeals
L-30351, Sep. 11, 1974
A squatter has no possessory rights of any kind against
the owner of the land into which he has intruded. His occupancy
of the land is merely tolerated by the owner. Thus, there is an
implied promise on his part to vacate upon demand.
J.M. Tuason and Co., Inc. v. Antonio Estabillo
L-20610, Jan. 10, 1975
ISSUE: Is a writ of execution and order of demolition
appealable?
509
Art. 539
CIVIL CODE OF THE PHILIPPINES
HELD: The rule is that it is not appealable where there
is no allegation that it has varied the tenor of the judgment.
If it were appealable, a case would never end, for as often as
an order of execution is issued, it would be appealed.
(3) Legal Means for Restoration to Possession
(a)
(b)
Reasons for requiring legal means;
1)
to prevent spoliation or a disregard of public order
(Roxas v. Mijares, 9 Phil. 520);
2)
to prevent deprivation of property without due process of law;
3)
to prevent a person from taking the law into his own
hands. (Yuson v. Guzman, 42 Phil. 22).
Thus,
1)
The owner should go to court, and not eject the unlawful possessor by force. (Bago v. Garcia, 5 Phil.
524).
2)
A tenant illegally forced out by the owner-landlord
may institute an action for forcible entry even if he
had not been paying rent regularly. (Mun. of Moncada v. Cajuigan, 21 Phil. 184).
3)
The proper actions are forcible entry or unlawful
detainer (summary action or accion interdictal),
accion publiciana, accion reivindicatoria; replevin;
injunction (to prevent further acts of dispossession).
(See discussion under Art. 428). However, injunction
is GENERALLY not the proper remedy to recover
possession, particularly when there are conflicting
claims of ownership. An accion reivin-dicatoria
would be better. (Cirila Emilia v. Epifanio Bado,
L-23685, Apr. 25, 1968). A final judgment in an unlawful detainer case may be executed even if there
is still pending an accion reivindicatoria, for the two
actions can co-exist. (Alejandro v. CFI of Bulacan,
40 O.G. [9S] 13, p. 128). A mere trespasser, even if
ejected, has no right to institute an action of forcible
entry. (Schrivinn v. Perkins, 78 Atl. 19).
510
CIVIL CODE OF THE PHILIPPINES
Art. 539
Catalina Bardelas, et al. v.
Hon. Antonio E. Rodriguez, et al.
L-38467, June 28, 1974
FACTS: On Aug. 31, 1970, Paz Basa Andres filed in the
Municipal Court of Las Piñas, Rizal an action for ejectment
against several tenants, in view of the failure of the latter to
pay rentals for the parcels of land leased by them. Defendants
argued among other things that under Rep. Act No. 6126, ejectment of tenants was prohibited.
ISSUE: May said tenants be ejected?
HELD: Yes, they may be ejected. If the reason for ejectment is because they have failed to pay any increased rent, or
because at the end of every month, the lease being paid monthly
is considered terminated, we can say that indeed ejectment is
prohibited. But here, neither reason applies, for there has been
no increase in rent, and the monthly termination is now the
ground for ouster. The ground is NONPAYMENT OF RENT, a
valid ground under paragraph 2 of Art. 1673 of the Civil Code.
RA 6126 has not amended said paragraph of Art. 1673.
[NOTE: Incidentally, the defendants were also questioning right of plaintiff to sue on the theory that plaintiff had not
proved ownership and on the further theory that plaintiff’s
husband should have joined her in the complaint. The court, in
answer to said allegations, stated that one who seeks to eject
a usurper or intruder from a parcel of land or building, or who
detains the same after termination of the right to possession,
need not show ownership, provided he or she is lawfully in
possession. In this case, Paz Basa Andres appears from the
record not only as possessor but also owner of the land in dispute. Anent the allegation that the husband should have been
joined as party plaintiff, the court said that the land was not
conjugal but was her separate property, inherited from her own
father.].
511
Art. 539
CIVIL CODE OF THE PHILIPPINES
Spouses Dolores Medina and Moises Bernal
v. The Honorable Nelly L. Romero Valdellon, et al.
L-38510, Mar. 25, 1975
FACTS: Spouses Dolores Medina and Moises Bernal sued
spouses Cipriano Villanueva and Rufina Panganiban for delivering of a parcel of land which allegedly should have been given
more than a year before, the possession of the latter being on
mere tolerance by the former. Defendants moved to dismiss, on
the ground that pending in another branch of the same court
(Bulacan CFI) was a land registration proceeding involving the
same property. ISSUE: Should the case be dismissed?
HELD: No, the case should not be dismissed on the ground
of litis pendentia for while the land registration case was indeed pending, the issues or causes of action involved in the
two proceedings are not the same. Land registration involves
ownership; the present suit involves recovery of possession,
and it is well known that such an action can be brought even
against the owner.
(4) Writ of Preliminary Mandatory Injunction
(a)
As a rule, injunction cannot substitute for the other, actions to recover possession. This is because in the meantime, the possessor has in his favor, the presumption of
rightful possession, at least, till the case is finally decided.
(See Devesa v. Arbes, 13 Phil. 273; see also Rustia v.
Franco, 41 Phil. 280). The exception, of course, is a very
clear case of usurpation. Similarly, a receiver should not
ordinarily be appointed to deprive a party who is in possession of the property in litigation of such possession.
(Mun. of Camiling v. Hon. Aquino and Simbre, L-11476,
Feb. 8, 1958).
(b)
BUT the Civil Code allows in the meantime, the “writ
of preliminary mandatory injunction” because “there are
at present prolonged litigations between the owner and
the usurper, and the former is frequently deprived of his
possession even when he has an immediate right thereto.”
(Report of the Code Commission, p. 98).
512
CIVIL CODE OF THE PHILIPPINES
(c)
Art. 539
Requisites for the Issuance of the Writ:
1)
in forcible entry cases (in the original court) — file
within 10 days from the time the complaint for forcible entry is filed (not from the time the dispossession
took place). (Art. 538).
2)
in ejectment (unlawful detainer cases) in the CFI
(RTC) or appellate court (Court of Appeals) — file
within 10 days from the time the appeal is perfected
(that is, from the time the attorneys are notified by
the Court of the perfection of the appeal), only if:
a)
the lessee’s appeal is frivolous or dilatory;
or
b)
the lessor’s appeal is prima facie meritorious. (Art. 1674).
[NOTE: In the original draft by the Code Commission,
the period for asking for the writ with preliminary mandatory
injunction was “ten days from the forcible entry.” A longer period could already result in a “stabilization” of the possession,
so that the remedy could no longer be availed of. However,
Congress changed the period to “ten days from the filing of the
complaint.” Hence as worded now, even if the forcible entry case
is filed, say eleven months from entry (after all the prescriptive
period for forcible entry is one year), the extraordinary remedy
here may still be availed of — contrary to the intent of the Code
Commission.].
Alvaro v. Zapata
GR 50548, Nov. 25, 1982
Generally, the writ of preliminary mandatory injunction
cannot be granted without a notice and a hearing where the
adverse party can be held and this is true even in connection
with the filing of a case of forcible entry.
NOTA BENE: The notice here is addressed to the defendant. (Carole v. Abarintos, 80 SCAD 116 [1997]).
513
Art. 539
CIVIL CODE OF THE PHILIPPINES
Commissioner of Customs v. Gaudencio Cloribel
and Herminio G. Teves
L-20266, Jan. 31, 1967
Purpose of a Preliminary Mandatory Injunction — By
Sec. 1, Rule 58, Rules of Court, it is now expressly provided
— though already long recognized — that a court, at any stage
of an action prior to final judgment, may “require the performance of a particular act, in which case it shall be known as a
preliminary mandatory injunction.” But stock must be taken
of the truism that, like preventive injunctions, it is but a provisional remedy to which parties may resort “for the preservation or protection of their rights or interests, and for no other
purpose, during the pendency of the principal action.” More
than this, as a mandatory injunction “usually tends to do more
than to maintain the status quo, it is generally improper to issue such an injunction prior to final hearing.” (Manila Electric
Railroad and Light Co. v. Del Rosario, 22 Phil. 433). Per contra
(upon the other hand), it may issue “in cases of extreme urgency;
where the right is very clear; where consideration of relative
inconvenience bear strongly in complainant’s favor, where there
is a willful and unlawful invasion of plaintiff’s right against his
protest and remonstrance, the injury being a continuing one;
and where the effect of the mandatory injunction is rather to
reestablish and maintain a pre-existing continuing relation
between the parties, recently and arbitrarily interrupted by
the defendant, than to establish a new relation.’’ (Ibid.). Indeed,
“the writ should not be denied the complainant when he makes
out a clear case, free from doubt and dispute. (Ibid.; see also
Villadores, et al. v. Encarnacion, 95 Phil. 913; Bautista, et al.
v. Barcelona, et al., 100 Phil. 1078, 1081-1082).
City of Legaspi v. Mateo L. Alcasid, et al.
L-17936, Jan. 30, 1962
FACTS: The Republic of the Philippines owned in the City
of Legaspi a parcel of land with improvements, and used as a
public vocational school, the Bicol Regional School of Arts and
Trades. In Mar. 1960, agents of the City of Legaspi forcibly
took possession of the premises on the allegation that same
514
CIVIL CODE OF THE PHILIPPINES
Art. 540
belonged to the City. The forcible taking over was prompted
by the refusal of the school authorities to vacate the premises.
The Republic asked for a writ of preliminary mandatory injunction.
HELD: The writ can properly be granted for it is evident
that the Republic was in prior physical possession before the
City took over the property forcibly.
Sy v. CA
111 SCAD 488, 313 SCRA 328
(1999)
The Court is at a loss as to the basis of the issuance of
a writ of preliminary injunction where the complainant only
made general allegations of hazard and serious damage to the
public due to violations of various provisions of the Building
Code, but did not show any grave damage or injury that it was
bound to suffer should the writ not issue.
Art. 540. Only the possession acquired and enjoyed in
the concept of owner can serve as a title for acquiring dominion.
COMMENT:
(1) Possession in the Concept of Owner
(a)
If a person possesses en concepto de dueño — he may
eventually become the owner by prescription.
(b)
Thus, a possessor merely in the concept of holder cannot acquire property by acquisitive prescription. (This
is because here the possession, far from being adverse,
recognizes right of ownership in others. [See Corporacion
v. Lozaro, 42 Phil. 119].). One cannot recognize the right
of another and at the same time claim adverse possession
which can ripen to ownership through acquisitive prescription. For prescription to set in, the possession must
be adverse, public and to the exclusion of all. (Corpus v.
Padilla, L-18099 and L-18136, July 31, 1962).
515
Art. 540
CIVIL CODE OF THE PHILIPPINES
(2) Possession in the Concept of Holder
The following cannot therefore acquire ownership by
prescription (as long as they remain such — mere possessors
in the concept of holder):
(a)
Lessees. (Laureto v. Mauricio, [CA] 37 O.G. 68, p. 1287)
or those merely permitted to occupy. (Mos v. Lanuza, 5
Phil. 457). The mere fact of working over a parcel of land
without expressing the concept in which the land was being worked on is no proof that the land is owned by the
one working nor proof that the possession is in the concept
of owner. The possession may have been as mere tenant.
(Alano, et al. v. Ignacio, et al., L-16434, Feb. 28, 1962).
(b)
Trustees. (Camagun v. Allingay, 19 Phil. 415).
[These include:
1)
parents over the properties of their unemancipated
minor children or insane children (Art. 1109);
2)
husband and wife over each other’s properties, as
long as the marriage lasts, and even if there be a
separation of property which had been agreed upon
in a marriage settlement or by judicial decree. (Art.
1109).].
(c)
Antichretic creditors. (Barreto v. Barreto, 37 Phil. 234).
(d)
Agents. (De Borja v. De Borja, 59 Phil. 19).
(e)
Attorneys (regarding their client’s properties). (Severino v.
Severino, 44 Phil. 343).
(f)
Depositaries. (Delgado v. Arandez, 23 Phil. 308).
(g)
Co-owners (unless the co-ownership is clearly repudiated
by unequivocal acts communicated to the other co-owners).
(See Cabello v. Cabello, 37 Phil. 328).
[NOTE: While a trust may be repudiated, this is not
allowed if the beneficiary is a minor (or insane) because
it is hard for the latter to protect his rights. (See Castro
v. Castro, 57 Phil. 675).].
[NOTE: The reason is really to prevent the encouragement of fraud and the legalization of usurpation.
(Camagun v. Allingay, 19 Phil. 415).].
516
CIVIL CODE OF THE PHILIPPINES
Art. 541
(3) Payment of Land Taxes — Usefulness
Although payment of land taxes is not evidence of ownership (Tupaz v. Ricamora, [CA] 37 O.G. 58), and although a
mere tax declaration or a tax assessment does not by itself give
the title, and is of little value in proving one’s ownership (See
Casimiro v. Fernandez, 9 Phil. 562; Prov. of Camarines Sur v.
Dir. of Lands, 64 Phil. 600), STILL payment of the land tax is
one of the most persuasive and positive indicia, which shows
the will of a person to possess in concepto de dueno or with
claim of ownership. And therefore, prescription may eventually
be had, provided that the other requisites for prescription are
present. (Tupaz v. Ricamora, 37 O.G. 58).
Otherwise put, while tax declarations and receipts are
NOT conclusive evidence of ownership, yet, when coupled with
proof of actual possession, tax declarations and receipts are
strong evidence of ownership. (Gesmundo v. CA, 117 SCAD
919, 321 SCRA 487 [1999].).
Art. 541. A possessor in the concept of owner has in his
favor the legal presumption that he possesses with a just
title and he cannot be obliged to show or prove it.
COMMENT:
(1) Presumption that Possessor Has a Just Title
There are two requirements under this article to raise the
disputable presumption of ownership (of a thing or a right):
(a)
One must be in possession (actual or constructive).
(b)
The possession must be in the concept of owner
(not mere holder). (A tenant cannot avail himself
of the presumption of just title because he is not a
possessor in the concept of owner). (See Laureto v.
Mauricio, 37 O.G. 1287).
Thus, in a general way, we may say that: POSSESSION
IS PRESUMED OWNERSHIP. (3 Sanchez Roman 439). The
Supreme Court has ruled that actual possession of the property
517
Art. 541
CIVIL CODE OF THE PHILIPPINES
under claim of ownership raises the disputable presumption
of ownership; the true owner must resort to judicial process
for the recovery of the property. (Chan v. Court of Appeals, L27488, June 30, 1970).
[NOTE: The Article can apply to both real and personal
property. Thus, if a person possesses the key to a car over which
he claims ownership, he can be presumed to be the owner. But
such presumption may be overcome by documentary evidence
concerning the car’s ownership. (See Narciso v. Ortiz, 45 O.G.
No. 5 {S}, p. 162).].
[NOTE: The failure to declare land for taxation shows
claimant did not believe himself to be the owner. (Cruzado
v. Bustos and Escaler, 34 Phil. 17). Upon the other hand, the
mere payment of taxes on land does NOT prove title to it; it is
evidence of claim of ownership, and when taken in connection
with possession, may be valuable in support of title by prescription. (Viernes v. Agpaoa, 41 Phil. 286).].
(2) Reasons for the Presumption
(a)
presumption that one is in good faith — or that one is
innocent of wrong.
(b)
inconvenience of carrying proofs of ownership around. (See
4 Manresa 248).
(3) Differences with Respect to ‘Just Title’ in the Chapter
on POSSESSION and ‘Just Title’ in the Chapter on PRESCRIPTION
IN PRESCRIPTION
IN POSSESSION
(a)
just title here is presumed.
(Title refers either to document or right). (4 Manresa
245). (The term “show’’ evidently refers to a document;
while the term “prove’’ refers to the right.)
518
(a) just title here must be
proved. (Title refers either
to document or right). (4
Manresa 245).
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 541
just title here means “titulo
verdadero y valido’’ (true
and valid title sufficient to
transfer ownership).
(b) just title here means “titulo colorado’’ (merely colorable title although there
was a mode of transferring ownership, the grantor was NOT the owner).
(See Doliendo v. Biarnesa,
7 Phil. 232).
(4) The Kinds of Titles (‘Titulos’)
(a)
True and Valid Title (Titulo Verdadero y Valido) —
Here, there was a mode of transferring ownership
and the grantor was the owner. It is defined as a title
which by itself is sufficient to transfer ownership without
the necessity of letting the prescriptive period elapse. (See
Doliendo v. Biarnesa, 7 Phil. 232).
Example: B bought a Ford Expedition Limited from
S, the owner thereof. Then S delivered the car to B. B
now has a true and valid title.
[NOTE: This is the just title referred to in Art. 541.
Thus, if B possesses the vehicle and drives it around as
an owner, other people cannot compel him to prove his
ownership over the same.].
(b)
Colorable Title (Titulo Colorado) —
That title where, although there was a mode of
transferring ownership, still something is wrong, because
the grantor is NOT the owner.
Example: B bought a BMW car from S. S then delivered the car to B. But it turns out that S never owned
the car, and that somebody else was its owner. Whether
B was in good faith or in bad faith is immaterial in deciding if he (B) is the owner; what is important is that he is
not the owner because he did not acquire or purchase the
property from the owner, his title being merely “colorado’’
or colorable.
519
Art. 541
CIVIL CODE OF THE PHILIPPINES
[NOTE: Titulo colorado is what is meant by “just
title’’ in the law of prescription, and not titulo verdadero y
valido, for if it were the latter, there would be no necessity
of still acquiring ownership thru prescription, the grantee
being already the owner.].
[NOTE: It must be remembered that:
1)
Ordinary prescription needs good faith and just title,
hence in the example given, if B is in good faith, he
may become owner of the car by prescription after
4 years (the car being personal property).
2)
Extraordinary prescription does not need either good
faith or just title, hence in the example given, if B is
in bad faith, although there may be just title (titulo
colorado), B may get ownership by prescription only
after 8 years.].
[NOTE: In case of real properties, the prescriptive periods are 10 years and 30 years respectively
for ordinary and extraordinary prescription.].
Samonte v. Court of Appeals
GR 44841, Jan. 27, 1986
FACTS: In 1930, A was the owner of five parcels
of land. In 1931, these parcels were transferred from
A to B. Two of the five parcels were later washed
away by a river. A died in Dec. 1941, while B died
in Apr. 1937. B was succeeded by her mother, who
died in 1947, and the mother was succeeded by C, B’s
sister. C died in Nov. 1962, and was succeeded by her
adopted children, D and E. C claimed ownership of
the remaining three parcels in May 1947, reiterated
her claim in December 1962. X and Y, the children
of A, sued D and E, for the return of the disputed
parcels, claiming that A transferred the parcels to
B only by way of antichresis. D and E claimed that
B bought the land from A in 1931. The trial court
dismissed X and Y’s complaint on the ground that C,
having claimed the disputed property since 1952 and
X and Y’s complaint having been filed only in April
520
CIVIL CODE OF THE PHILIPPINES
Art. 541
1970, or more than 10 years after December 1952.
D and E, the successor of C, should be deemed to
have acquired title to the disputed property through
ordinary prescription under the provisions of the
present Civil Code. The appellate court affirmed the
trial court’s judgment, saying that D and E being in
possession of the property in the concept of owner,
they are presumed to own the land under just title,
which they need not show, pursuant to Article 541 of
the Civil Code. Also, even assuming the antichresis,
X and Y’s right to recover the disputed property accrued in 1941 (when the alleged loan with interest at
6% had been fully paid) and they incurred in laches
in not asserting such right within a reasonable time
instead of waiting 29 years thereafter.
HELD: The appellate court correctly affirmed
the trial court’s decision based on ordinary acquisitive
prescription, except that the required period should
start from May 1947, when C executed the affidavit
before a judge, in which C claimed ownership over the
property. No judicial summons which could interrupt
possession for purposes of prescription (Art. 1123,
Civil Code) had been served on C. Neither have D
and E been served with judicial summons prior to the
institution of the suit for recovery filed by X and Y.
An instrument of antichresis could not have
been executed in 1930, because on or about that
time, an express contract of antichresis would have
been unusual. Laches: The inaction of X and Y for a
considerable period of time reflects on the credibility
of their pretense.
(c)
Putative Title (Titulo Putativo)
That title where although a person believes himself
to be the owner, he nonetheless is not, because there was
no mode of acquiring ownership.
Example: A is in possession of a piece of property
in the mistaken belief that it had been inherited by him
from Y.
521
Art. 542
CIVIL CODE OF THE PHILIPPINES
[NOTE: In the example given, there was really no
mode, no succession as when Y, for example, is still alive.
(See Viso, Derecho Civil Parte Segunda, p. 541, cited in
Doliendo v. Biarnesa, 7 Phil. 232).].
(5) Query Re Effect of Admission that Another Person Used
to be the Owner
Sarita v. Candia
23 Phil. 443
FACTS: A was in possession of property, the ownership of
which was claimed by B. A admitted however that the property
used to belong to X while X was still alive. A further stated
that he had acquired the property from X. Is it now essential
for A to prove his just title over the property?
HELD: Yes, in view of the admission by A of X’s prior
ownership over the property. A must indeed prove his just title
even though he is in possession of the property.
(6) Query
Suppose I really own and possess a piece of land. Do I
have to tell everybody that I am claiming the land as my own,
in other words, do I have to show adverse possession?
HELD: No. Said adverse possession is needed only if I want
to acquire something by prescription. In my case, I do not need
prescription since I am already the owner of the land. (Gamboa
v. Gamboa, 52 Phil. 503). The fact that my brothers or sisters
may have persistently questioned my rights is of no moment,
and does not impair my right. (Gamboa v. Gamboa, supra).
(7) Effect of Mere Assertion of a Right Instead of Possession
A person who is not in fact in possession cannot acquire a
prescriptive right to the land by the mere assertion of a right
therein. (Gamboa v. Gamboa, supra).
Art. 542. The possession of real property presumes that
of the movables therein, so long as it is not shown or proved
that they should be excluded.
522
CIVIL CODE OF THE PHILIPPINES
Art. 543
COMMENT:
(1) Presumption of Possession of Movables Found in an
Immovable
Example:
If I possess a house (real property), it is presumed that I
also possess the furniture (personal property) therein.
[NOTE: By analogy, if my possession of the house is
in concepto de dueno, my possession of the furniture is also
presumed to be in concepto de dueno. Therefore, my just title
to BOTH the house and the furniture is presumed. (See Art.
541).].
(2) Applicability of the Article
(a)
whether the possessor be in good faith or bad faith
(b)
whether the possession be in one’s own name or in another’s
(c)
whether the possession be in concepto de dueno or in the
concept of holder. Thus, the lessee of a building is presumed to be the possessor of the movables found therein,
for he who needs them is supposed to have been the one
who introduced the movables into the building. (4 Manresa 250).
(3) Rights Are Not Included Within the Scope of the Presumption
By “real property’’ and “movables’’ we mean only real or
personal THINGS, not rights. (4 Manresa 250).
Art. 543. Each one of the participants of a thing possessed in common shall be deemed to have exclusively
possessed the part which may be allotted to him upon the
division thereof, for the entire period during which the
co-possession lasted. Interruption in the possession of the
whole or a part of a thing possessed in common shall be to
523
Art. 543
CIVIL CODE OF THE PHILIPPINES
the prejudice of all the possessors. However, in case of civil
interruption, the Rules of Court shall apply.
COMMENT:
(1) Example of Exclusive Possession by a Previous CoOwner
A and B have been co-possessors of a piece of land in
Greenhills since 2002. If in 2006, there is a partition, A is
deemed to have possessed exclusively the portion given him, not
since 2002, but since 2006. (This is useful in case of acquisition
by prescription.)
(2) Meaning of ‘Shall be Deemed’
This does not establish a mere presumption. It gives a
right.
(3) Example of Interruption in Possession of the WHOLE
A, B, and C have been co-possessors of a piece of land since
2002. If in 2006, A, B, and C lose possession over the whole
land, it can be said that the three of them were in possession
for only four years.
[NOTE: If in the above example A, B, and C exercised their
possession thru a mutual agent X, the same rule applies.].
(4) Example of Interruption in Possession of PART of the
Thing
A and B have been co-possessors of a piece of land since
2002 thru a mutual agent X. In 2006, X lost possession of
one-fifth of the land. A’s and B’s possession over the remaining four-fifth continues, the interruption being limited only to
one-fifth.
[NOTE: If A and B had co-possessed the land in equal
shares, the co-possession of the remaining four-fifths will also
be in equal shares. If A and B had co-possessed in the proportion of 3 to 1, their shares in the remaining four-fifths would
524
CIVIL CODE OF THE PHILIPPINES
Art. 544
also be in the proportion of 3 to 1. In other words, there is a
PROPORTIONATE losing in the area possessed.].
(5) Rules to Apply for Civil Interruption —
The “Rules of Court” applies (Art. 543)
(a)
Civil interruption is produced by judicial summons to the
possessor. (Art. 1123).
(b)
Judicial summons shall be deemed not to have been issued, and shall not give rise to interruption:
1)
if it should be void for lack of legal solemnities;
2)
if the plaintiff should desist from the complaint or
should allow the proceedings to lapse;
3)
if the possessor should be absolved from the complaint.
In all these cases, the period of the interruption shall be
counted FOR the prescription. (Art. 1124).
Art. 544. A possessor in good faith is entitled to the fruits
received before the possession is legally interrupted.
Natural and industrial fruits are considered received
from the time they are gathered or severed.
Civil fruits are deemed to accrue daily and belong to
the possessor in good faith in that proportion.
COMMENT:
(1) Right of a Possessor in Good Faith to Fruits Already
Received
First Paragraph: “A possessor in good faith is entitled
to the fruits received before the possession is legally interrupted.’’
(a)
Reason for the law: Justice demands that the fruits be
retained by the possessor who thought that he was really the owner of the property, and who, because of such
525
Art. 544
CIVIL CODE OF THE PHILIPPINES
thought had regulated his daily life, income, and expenses
by virtue of such fruits. Moreover, the possessor should
be rewarded for having contributed to the INDUSTRIAL
WEALTH, unlike the owner, who by his presumed negligence, had virtually discarded his property (SALVAT).
Ortiz v. Kayanan
L-32974, July 30, 1979
A possessor in good faith is entitled to the fruits
received before the possession is legally interrupted. This
occurs from the moment defects in the title are made known
to the possessor, by extraneous evidence or by the filing of
an action in court. Although because of the interruption
his good faith ceases, the possessor can still retain the
property, pursuant to Art. 546 of the Civil Code, until he
has been fully reimbursed for all the necessary and useful
expenses made by him on the property.
(b)
Fruits refer to natural, industrial, and civil fruits, not to
other things. (If no actual fruits are produced, reasonable
rents — civil fruits — must be given.) (See Antonio v.
Gonzales, [CA] O.G., July, 1943, p. 687).
(c)
Legal interruption happens when a complaint is filed
against him and he receives the proper judicial summons.
(See Art. 1123). All fruits accrued and received since said
date must be turned over to the winner, that is, either
the owner or the lawful possessor adjudged as such by
the court. (See Tacas v. Tabon, 53 Phil. 356). Before legal
interruption, the fruits received are his own. (Nacoco v.
Geronimo, L-2899, Apr. 29, 1949). After the receipt of the
judicial summons, the right to get the fruits not yet gathered ceases. (Mindanao Academy, Inc., et al. v. Ildefonso
D. Yap, L-17681-82, Feb. 26, 1965).
(d)
The reason why fruits should be returned from the TIME
of legal interruption is that it is ordinarily only from
said date that the possessor should be considered in
BAD FAITH. Therefore, should there be proof that BAD
FAITH had not set in even BEFORE legal interruption,
fruits should be returned from that date of CONVERSION
526
CIVIL CODE OF THE PHILIPPINES
Art. 544
into bad faith. This is because possessors in bad faith
are not entitled to the fruits. As a matter of fact, the law
provides that “the possessor in bad faith shall reimburse
the fruits received and those which the legitimate possessor (or owner) could have received.” (Art. 549). This
is true whether the possession in BAD faith was legally
interrupted or not. (See 3 Sanchez Roman 442-443). It
is understood of course that he is entitled to the fruits
received BEFORE the conversion into BAD FAITH, for
then, he would still be in good faith. (See Calma v. Calma,
56 Phil. 102; Tolentino v. Vitug, 39 Phil. 126).
Calma v. Calma
56 Phil. 102
FACTS: A in good faith possessed land and received
the fruits. In 1927, he was summoned to court. But in the
meantime he collected fruits. Should he return the value
of said fruits?
HELD: He should return only the value of the fruits
he had collected after 1927, but not that prior to said date,
since before said date, he was a possessor in good faith.
(See also Alunen v. Tilan, 66 Phil. 463).
Aquino v. Tañedo
39 Phil. 517
FACTS: A bought and possessed land from B. Later,
they mutually agreed to cancel or rescind the sale. A then
returned the land, and B returned the price. Does A also
have to return the fruits, considering the fact that under
Art. 1385, rescission ordinarily requires return of the
fruits?
HELD: No, since his possession of the land prior to
the rescission was in good faith.
Cleto v. Salvador
11 Phil. 416
FACTS: A bought land from B who turned out to
be not the owner. C, the true owner, sued A for recovery
527
Art. 544
CIVIL CODE OF THE PHILIPPINES
of the land and the fruits. A in good faith had believed
that he had purchased the land from the owner. ISSUE:
Should A return the fruits?
HELD: Yes, but only the fruits received after C had
instituted the action and A had received the summons.
DBP v. CA
114 SCAD 197, 316 SCRA 650
(1999)
When a contract of sale is void, the possessor is
entitled to keep the fruits during the period for which it
held the property in good faith, which good faith of the
possessor ceases when an action to recover possession of
the property is filed against him and he is served summons therefor.
(2) When Natural and Industrial Fruits are Considered
Received
Second Paragraph: “Natural and industrial fruits are considered received from the time they are gathered or severed.”
(a)
If at the time of legal interruption, the crops are still
growing, the rule on pending crops, not that on gathered
crops, should apply. (See Art. 545).
(b)
If at the time of legal interruption, the crops have already
been gathered, but are sold only after such interruption,
the sale is immaterial, for the law requires only a gathering or severance, so Art. 544 applies.
(3) When Civil Fruits Are Deemed to Accrue
Third Paragraph: “Civil fruits are deemed to accrue daily
and belong to the possessor in good faith in that proportion.’’
(a)
If civil fruits (like rents) are accrued daily, Art. 545 does
not apply.
(b)
Actual receipt of the rents is immaterial; hence, even if received only, for example, on the 30th of a month, all rents
528
CIVIL CODE OF THE PHILIPPINES
Art. 545
accrued before the 21st of the month (date for example of
legal interruption) should belong to the possessor in good
faith. (See by analogy Waite v. Williams, Chandler and
Co., 5 Phil. 571).
Art. 545. If at the time the good faith ceases, there should
be any natural or industrial fruits, the possessor shall have
a right to a part of the expenses of cultivation, and to a part
of the net harvest, both in proportion to the time of the possession.
The charges shall be divided on the same basis by the
two possessors.
The owner of the thing may, should he so desires, give
the possessor in good faith the right to finish the cultivation
and gathering of the growing fruits, as an indemnity for his
part of the expenses of cultivation and the net proceeds; the
possessor in good faith who for any reason whatever should
refuse to accept this concession, shall lose the right to be
indemnified in any other manner.
COMMENT:
(1) Rights Re Pending Fruits
(a)
This article applies to PENDING fruits, natural or industrial.
(b)
Example
A possessed in good faith a parcel of land. At the time
he received judicial summons to answer a complaint filed
by B, the crops still growing had been there for 2 months.
Harvest was made only after 4 more months (For his crop
needed a total of 6 months from planting to harvesting).
How should said crops be divided between A and B?
ANS.: In the proportion of 2 to 4 (or 1 to 2), 2 for
A and 4 for B. This is what the law means when it says
that the net harvest shall be divided in proportion to the
time of possession.
529
Art. 545
CIVIL CODE OF THE PHILIPPINES
(2) Sharing of Expenses and Charges
(a)
The expenses for cultivation shall also be divided pro rata
(2 to 4). The law says “the possessor shall have a RIGHT
to a part of the expenses for cultivation in proportion to
the time of possession. (This may in certain cases be UNFAIR because although he may have spent MORE than
the owner, still he will be entitled to a reimbursement
of LESS since his possession is shorter. The better rule
would be for the expenses to be borne in proportion to what
each receives from the harvest.) (See Art. 443). Otherwise,
unjust enrichment would result. (See 3 Manresa 187).
(b)
The charges (those incurred because of the land and the
fruits, like TAXES, or INTEREST on MORTGAGES are
what are referred to as CHARGES, and not those incurred
on or in them, such as improvements) are also to be divided in proportion to the time of possession. (Art. 545,
2nd par.; see also 4 Manresa 276).
(c)
In the example given, B (the owner), if he so desires has
an option —
(d)
1)
to get the right already discussed. (Art. 545, par. 1),
or
2)
to allow A (the possessor in good faith) to FINISH
the cultivation and gathering of the growing crops,
as an INDEMNITY for his part of the expenses of
cultivation and the net proceeds. (If A refuses for
ANY REASON to accept this concession, A loses
the right to be indemnified IN ANY OTHER MANNER). (B is given this option because he may not be
interested in the pending fruits at all, or because he
realizes that to continue the cultivation might result
in a financial LOSS for him.) (The refusal causes
LOSS of indemnity even if the fruits be LESS than
the expenses.)
In the example given, if the fruits be LESS than the expenses, it is but just to reimburse A and B for their respective
expenses, proportionate not to the time of possession (the
rule given in Art. 545 cannot apply for there is NO NET
530
CIVIL CODE OF THE PHILIPPINES
Art. 545
HARVEST), but to the amount of their respective expenses.
And since said reimbursement must come from the value
of the fruits, it follows that each bears a pro rata LOSS.
This is equitable, and should be the rule applied unless B
exercises the option referred to in (c).
(3) Effect of Unfortunate Illness
The phrase “for any reason whatever” in the third paragraph of Art. 545 seems unduly harsh because it may happen
that an unfortunate illness will prevent the possessor from
continuing the cultivation.
(4) Applicability of Article Only to Possessors in Good
Faith
Note that Art. 545 applies only to a possessor in GOOD
faith for a possessor in bad faith has no right whatsoever to
fruits already gathered nor to fruits still pending, except that
in the former case (gathered fruits), he gets back the necessary
expenses for production, gathering, and preservation of fruits.
(Art. 443; see also Director of Lands v. Abagat, 53 Phil. 147). In
the case of pending fruits, the principle of accession applies, and
the law clearly states that he who plants or sows in BAD FAITH
on the land of another, loses whatever is planted or sown without
right to indemnity. (Art. 449; see also 3 Manresa 219-220; Jison
v. Hernaez, O.G., May, 1943, p. 492).
(5) Crops Not Yet Manifest
Art. 545 applies to pending crops. Suppose the crops have
already been planted but are not yet manifest at the time there
is a transfer of possession, should the article also apply? It is
submitted that the answer is YES, by the application of the
general rules stated in Art. 443. (See 4 Manresa 282).
(6) Probative Effect of Fruit Gathering
Gathering of part of the pending fruits by the possessor
does not necessarily negate ownership of the land in another
person. (See Muyco v. Montilla, et al., 7 Phil. 498).
531
Art. 546
CIVIL CODE OF THE PHILIPPINES
(7) Similar Rules
For similar rules on pending or growing crops, see:
(a)
Art. 567 — in case of change of usufruct.
(b)
Art. 1617 — in case of conventional redemption.
Art. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain
the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor
in good faith with the same right of retention, the person
who has defeated him in the possession having the option
of refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by
reason thereof.
COMMENT:
(1) Necessary Expenses Defined (Gastos Necesarios)
They are those without which the thing would physically
deteriorate or be lost; hence, those made for the preservation
of the thing. (4 Manresa 270-271).
(2) Sample of Necessary Expenses
(a)
Those incurred for cultivation, production, and upkeep.
(Mendoza v. de Guzman, 52 Phil. 104).
(b)
Those made for necessary repairs of a house. (Angeles v.
Lozada, 54 Phil. 185; Alburo v. Villanueva, 7 Phil. 277).
[By ordinary repairs are understood such as are
required by the wear and tear due to the natural use of
the thing, and are indispensable for its preservation. (Art.
592). They do not increase the thing’s value; rather, they
merely prevent the things from becoming useless. (4 Manresa 270-271).]. [Urgent repairs — reparacion urgentisima
— are also necessary expenses. (See Alburo v. Villanueva,
7 Phil. 277).].
532
CIVIL CODE OF THE PHILIPPINES
Art. 546
(3) The following are NOT Necessary Expenses
(a)
Those incurred for the filling up with soil of a vacant or
deep lot. (This is not also a repair since the term “repair”
implies the putting back into the condition in which it
was originally, and not an improvement in the condition
thereof by adding something new thereto. The expenses
are indeed in the nature of USEFUL improvements. (Alburo v. Villanueva, 7 Phil. 277).
(b)
A house constructed on land possessed by a stranger (not
the owner), because the house cannot be said to preserve
the land. (Valencia v. Ayala de Roxas, 13 Phil. 45). (The
house is USEFUL.)
(c)
Land taxes are, for the purposes of the Article, not necessary expenses, for they are needed, not for preservation of
the land itself; but for its continued possession. Failure to
pay said taxes results not in destruction, but forfeiture,
therefore they should be merely considered CHARGES.
(4 Manresa 271-272; Cabigao v. Valencia, 53 Phil. 646).
Consequently, Art. 545 regarding PRO RATING of charges
should apply.
(d)
Unnecessary improvements on a parcel of land purchased
at a sheriff’s auction sale, made just to prevent redemption from taking place. (Flores v. Lim, 50 Phil. 738).
Flores v. Lim
50 Phil. 738
FACTS: The real property of A, a debtor, was sold
at a sheriff’s sale to B. A, under the law, had one year
within which to redeem said property (lands). But within
said period, B, by force, took possession of the property,
planted coconut trees thereon and make some extensive
improvements. Before the time for redemption expired, A
was able to redeem the property. ISSUE: Is B entitled to
reimbursement for the coconut trees he had planted as
well as for the other improvements?
HELD: No, B here is a possessor in bad faith (for he
should have waited for the termination of the one-year
533
Art. 546
CIVIL CODE OF THE PHILIPPINES
redemption period before entering into the possession of
the property), and is therefore not entitled to a refund of
useful improvements. On the other hand, the expenses
he sought to recover were not even necessary expenses.
Moreover, regarding judicial sales, the law defines and
specifies what the redemptioner is required to pay in order to redeem, and in the absence of something unusual
or extraordinary expense incurred in the preservation of
the property (which incidentally has to be approved by
the court), the redemptioner will not be required to pay
any other or greater amount.
(e)
Expenses made by the possessor — not to preserve the
property or to save it from being lost — but to enable him
to use the property for his own purposes. (Roberto Laperal
v. William Rogers, L-16590, Jan. 30, 1965).
(4) Rights of a Possessor (in the Concept of Owner) as to
the Necessary Expenses
(a)
(b)
If in good faith — entitled to:
1)
refund
2)
retain premises till paid
If in bad faith — entitled ONLY to a refund (no right of
RETENTION, as penalty). (Dir. of Lands v. Abagat, 53
Phil. 147).
[NOTE: If the owner sues the possessor for the recovery of the property, the possessor in good faith (who
is thus entitled to a refund) must file a counterclaim for
the refund of necessary and useful expenses, otherwise
the judgment in the case for possession will be a BAR to
a subsequent suit brought solely for the recovery of such
expenses. The purpose is clearly to avoid the multiplicity
of suits. (Beltran v. Valbuena, 53 Phil. 697).].
(5) Useful Expenses Defined (Gastos Utiles)
They are those that add value to the property (Aringo
v. Arenas, 14 Phil. 263), or increase the object’s productivity
(Valenzuela v. Lopez, 51 Phil. 279), or useful for the satisfaction
534
CIVIL CODE OF THE PHILIPPINES
Art. 546
of spiritual and religious yearnings (Anacleto Gongon v. Tiangco,
[CA] 36 O.G. 822), or give rise to all kinds of fruits. (Rivera v.
Roman Catholic Archbishop of Manila, 40 Phil. 717).
[NOTE: Depending upon individual capacities and needs,
useful expenses may SOMETIMES be considered LUXURIOUS
EXPENSES. Hence, if only certain or definite possessors would
benefit, they may be luxuries; if in general every possessor
gains, they are useful expenses. The determination is really a
judicial question. (See 4 Manresa 274-275). In a sense, luxurious expenses can increase civil fruits, not the industrial or
natural fruits. (See Rivera v. Roman Catholic Archbishop of
Manila, 40 Phil. 717).].
(6) Examples of Useful Expenses
(a)
Those incurred for an irrigation system. (Valenzuela v.
Lopez, 51 Phil. 279).
(b)
Those incurred for the erection of a chapel, because aside
from its possibility of conversion into such materialistic
things as a warehouse or a residence, the chapel satisfies
spiritual and religious aspirations and the attainment
of man’s higher destinies. “To uphold the opposite view
would be to reduce life to a mere conglomeration of desires
and lust, when, as a matter of fact, life is also a beautiful
aggregate of noble impulses and lofty ideals.” (Gongon v.
Tiangco, [CA] 36 O.G. 822).
(c)
Those incurred for the making of artificial fishponds.
(Rivera v. Roman Catholic Church, 40 Phil. 717).
(d)
Those incurred for the construction of additional rooms in
a house, for use as kitchen, bathroom, stable, etc. (Robles
v. Lizarraga, 42 Phil. 584).
(e)
Those incurred for clearing up land formerly thickly
covered with trees and shrubbery. (Toquero v. Valdez, 35
O.G. 1799).
(7) Rights of a Possessor (in the Concept of Owner) as to
the USEFUL Expenses
(a)
If in GOOD faith.
535
Art. 546
CIVIL CODE OF THE PHILIPPINES
1)
right to REIMBURSEMENT (of either the amount
spent or the increase in value — “plus value” — at
OWNER’S OPTION). (Art. 546).
Chua v. CA
301 SCRA 356
(1999)
There is no provision of law which grants the lessee a
right of retention over the leased premises on the ground
that he made repairs on the premises — Article 448 of the
Civil Code, in relation to Article 546, which provides for
full reimbursement of useful improvements and retention
of the premises until reimbursement is made, applies only
to a possessor in good faith, i.e., one who builds on a land
in the belief that he is the owner thereof.
Kilario v. CA
GR 134329, Jan. 19, 2000
It is well settled that both Art. 448 and Art. 546,
respectively, which allow full reimbursement of useful
improvements and retention of the premises until reimbursement is made to apply only to a possessor in good
faith, i.e., one who builds on land with belief that he is
the owner thereof. Verily, persons whose occupation of a
realty is by sheer tolerance of its owners are not possessors
in good faith.
2)
right of RETENTION (till paid). (Art. 546).
3)
right of REMOVAL (provided no substantial damage or injury is caused to the principal, reducing its
VALUE) — UNLESS the winner (owner or lawful
possessor) exercises the option in (1). (Art. 547).
[NOTE: Thus the law really gives preference to
the WINNER.].
[NOTE: The possessor in good faith is entitled
to both the fruits and expenses (necessary or useful),
hence they do not compensate each other. (4 Manresa
536
CIVIL CODE OF THE PHILIPPINES
Art. 546
290). (See also Toquero v. Valdez, 35 O.G. {102} 1799
which ruled against a SET-OFF).].
(b)
If in BAD faith.
The possessor in BAD faith is NOT ENTITLED to
any right regarding the useful expenses. [BUT see Angeles
v. Guevara, L-15697, Oct. 31, 1960, where the Supreme
Court thru Justice Gutierrez David made the statement
that although a possessor in bad faith is NOT entitled to
reimbursements for expenses incurred, he may nevertheless REMOVE the objects (repairs on buildings) provided
the things suffer NO INJURY thereby, and that the lawful
possessor does not prefer to retain them by paying the
value they may have at the time he enters into possession. Evidently, here, the Court was thinking NOT of
useful improvement, but of expenses for PURE LUXURY
or MERE PLEASURE. (See Art. 549).].
In the case however of Santos v. Mojica, L-25450,
Jan. 31, 1969, see facts and ruling in comments under
Art. 449 — the Court held that a builder or possessor
in bad faith is not entitled to indemnity for any useful
improvement on the premises — because of Art. 449.
Reasons why there should be NO right:
1)
The law OMITS his right to useful expenses [but
states his right regarding luxurious expenses. (See
Art. 549).].
2)
The law, in the chapter on accretion, provides that
a builder in bad faith loses whetever is built without payment of any indemnity. (See Arts. 449, 450,
451).
[Thus, even if removal is possible without
substantial injury, the possessor in bad faith has
no right to make the removal. (See 4 Manresa, 295;
see also Rivera v. Roman Catholic Church, 40 Phil.
717; but as discussed above, see Angeles v. Guevara,
L-15697, Oct. 31, 1960). (See also Flores v. Lim, 50
Phil. 738, where improvements made during the oneyear period of redemption were not reimbursed.) (See
537
Art. 546
CIVIL CODE OF THE PHILIPPINES
also Beltran v. Valbuena, 53 Phil. 697; Case, et al. v.
Cruz, [CA] 50 O.G. 618).]. In a case, the Court held
that removable properties, like books and furniture
brought into a building constructed in bad faith may
be removed, but not the building itself. In the case
of the building, there clearly is accession, but this
is not so with reference to the removable objects.
(Mindanao Academy, Inc., et al. v. Ildefonso D. Yap,
L-17681-82, Feb. 26, 1965).
(8) Decided Doctrines and Cases
Valenzuela v. Lopez
51 Phil. 279
Useful expenses do not include the value of farming animals which the possessor retains and which do not remain on
the land, nor the expenditures through which the possessor
receives the fruits.
Monte de Piedad v. Velasco
61 Phil. 467
FACTS: A possessed land registered under the Torrens
system in the name of another, but A did not know of such
registration. Is A entitled to a refund for useful expenses?
HELD: No, since A is not a possessor in good faith, the
registration being binding on the whole world.
Galit v. Ginosa and Hernandez
62 Phil. 451
FACTS: A, claiming to be the owner of a parcel of land,
asked for its registration under the Torrens system. The land
contained some useful improvements, the registration of which
was also asked by B. B opposed the registration, and because
of the evidence he presented, B was declared the owner of both
the land and the improvements thereon. The court then ordered
the registration of said things in B’s name. Sometime later, A
brought an action to recover the value of the improvements
from B. Do you believe that the court should consider this new
action?
538
CIVIL CODE OF THE PHILIPPINES
Art. 546
HELD: No, the action will not prosper because the question of ownership of the lands and its improvements has
already been decided in the registration case, and therefore,
constitutes res judicata.
Raquel v. Lugay
40 O.G. 8, p. 74
FACTS: Mr. Raquel bought from Mr. Lugay a parcel of
land with a Torrens Title, but the deed of sale was not registered. Later, the creditors of Mr. Lugay attached said land
as Mr. Lugay’s property, and in the sale on execution, a third
party G was able to purchase the land from the sheriff. Mr.
Raquel now seeks to get back the land, or at least to recover
the useful expenses he had introduced thereon prior to his
knowledge of the public sale in favor of G.
HELD: The third party G has a better right to the land
because Raquel had failed to register the sale in his (Raquel’s)
favor. But Raquel is entitled to reimbursement of his necessary
and useful expenses incurred prior to his knowledge of the public
auction since he can be deemed a possessor in good faith.
Robles, et al. v. Lizarraga Hermanos, et al.
42 Phil. 584
A possessor in good faith of a house, who had introduced
such improvements as “a dining room, kitchen, closet, and
bathroom in the upper and lower stories of the house and a
stable, suitable as a coach house and dwelling,” was being
ousted by the owner, who however did not want to pay for said
useful improvements. Due to the non-reimbursement of the
above-mentioned useful expenditures, the possessor is entitled
to RETENTION. Damages cannot be assessed against the possessor for he was merely exercising his legitimate rights, when
he refused to leave the premises.
Beltran v. Valbuena
53 Phil. 697
FACTS: X possessed in bad faith Y’s land. Y then brought
an action to eject X. Although X had incurred some necessary
539
Art. 546
CIVIL CODE OF THE PHILIPPINES
and useful expenses on the land, X did not set up these as a
counterclaim in the ejectment proceedings. Y won the case.
Later X sought to recover in another action said necessary and
useful expenses. Will the recovery prosper?
HELD: The recovery cannot prosper:
1)
since, regarding, the useful expenses, X is a possessor in bad faith, and is therefore not entitled to any
refund;
2)
and since, regarding the necessary expenses, the
failure to present a counterclaim therefor in the
ejectment proceedings, now constitutes a bar to their
recovery.
Director of Lands v. Abagat, et al.
53 Phil. 147
FACTS: A lawyer, P, purchased from his client S, certain parcels of land involved in a court litigation concerning
hereditary rights. The sale was declared void since a lawyer
cannot purchase the property of his client while the same is
involved in a suit. But P refused to surrender possession of the
property till after he had been reimbursed the necessary and
useful expenses. Is P correct?
HELD: P is not correct both with reference to the necessary and the useful expenses, because although he should
be refunded necessary expenses, he has no right of retention
because of his bad faith. Regarding useful improvements, he
is entitled neither refund nor retention.
(9) Queries and Remarks
(a)
Regarding the option given to owner when the possessor
is in good faith (refund useful expenses or pay increase in
value), does not said option seem absurd since invariably
the owner will always choose that which is LOWER?
(b)
In some instances, attempts to introduce useful improvements may only decrease (and not increase) the value of
the premises. Example: If the 5th coat of painting of a
house is in BLACK, instead of a more attractive color.
540
CIVIL CODE OF THE PHILIPPINES
Art. 547
[NOTE: While 1, or 2, or 3 coatings of paint may be
necessary to prevent rapid deterioration by exposure to
the elements, a fifth coating is certainly no longer necessary.].
(c)
A is possessor in good faith of land and he has constructed
various useful improvements thereon. Later, the real
owner appears and wants to get back the property. A
asks for reimbursement of the useful expenses, but the
owner does not give him the amount, so A continues in
the premises. After 5 months, the owner wants to give A
the refund asked, but at the same time, he claims rental
for the use of the premises. Issue: Is A obliged to pay rent
for the 5-month period?
ANS.: No, in view of his right of retention, being a
possessor in good faith. (Art. 546, 2nd par.).
(d)
In the preceding case, suppose A had introduced useful
expenses during the period of retention, would he be entitled to a refund for said additional improvements?
ANS.: No, because at the time of introduction of the
additional improvements, he already knew that he was
not the owner of the land.
Art. 547. If the useful improvements can be removed
without damage to the principal thing, the possessor in good
faith may remove them, unless the person who recovers the
possession exercises the option under paragraph 2 of the
preceding article.
COMMENT:
(1) Right to Remove Useful Improvements
See discussion of this article under Art. 546.
(2) Problem
A possessed land in good faith, and he constructed a fence
around it, a fence which he can remove without destroying the
land. If A wants to remove them, but the landowner wants to
retain them, who should prevail?
541
Art. 548
CIVIL CODE OF THE PHILIPPINES
ANS.: The owner of the land prevails for the right of removal is subordinate to the option to retain granted the owner,
but the proper indemnity must be paid. (Art. 547).
(3) Meaning of ‘Damage’
“Damage’’ here means a substantial one that reduces
the value of the property, thus a slight injury curable by an
ordinary repair does not defeat the right of removal, but the
repairs should be chargeable to the possessor, for it is he who
benefits by the removal and the object removed. (See 4 Manresa
296-297).
Art. 548. Expenses for pure luxury or mere pleasure
shall not be refunded to the possessor in good faith; but he
may remove the ornaments with which he has embellished
the principal thing if it suffers no injury thereby, and if his
successor in the possession does not prefer to refund the
amount expended.
COMMENT:
(1) Expenses for Pure Luxury
The article deals with expenses for pure luxury or mere
pleasure (ornamental expenses) defined as those which add
value to the thing only for certain determinate persons in
view of their particular whims. They are neither essential for
preservation nor useful to everybody in general. (See 4 Manresa
274-275).
(2) Examples of Ornamental Expenses
(a)
hand paintings on the wall of a house
(b)
a garage made of platinum
(c)
water fountains in gardens
(3) Rights of a Possessor (in the Concept of Owner) with
Reference to Luxurious or Ornamental Expenses
(a)
If in GOOD faith:
In general, no right of refund or retention but can
542
CIVIL CODE OF THE PHILIPPINES
Art. 549
remove if no substantial injury is caused. However, owner
has OPTION to allow:
(b)
1)
possessor to remove
2)
or retain for himself (the owner) the ornament
by REFUNDING the AMOUNT SPENT. (Art.
548).
In BAD faith:
In general, no right of refund or retention but can
remove if no substantial injury is caused. However, owner
has OPTION to allow:
1)
possessor to remove
2)
or retain for himself (the owner) the ornament
by REFUNDING the VALUE it has at the
TIME owner ENTERS INTO POSSESSION.
(Art. 549).
[NOTE: Observe similarities in rights, the only difference being in the value of the REFUND if the option is exercised.].
[NOTE: The value of the refund if the possessor is in bad
faith is obviously LESS, because in the meantime, depreciation
has set in.].
(4) Meaning of ‘Injury’
Same as “damage’’ in the preceding article.
(5) Illustrative Problem
I possessed land in good faith, and introduced thereon
ornamental expenses which cannot be removed without substantial injury. The owner does not want to refund me any
amount for said ornaments. May I remove them?
ANS.: No, because in here, there would be substantial
injury.
Art. 549. The possessor in bad faith shall reimburse
the fruits received and those which the legitimate possessor could have received, and shall have a right only to the
543
Art. 549
CIVIL CODE OF THE PHILIPPINES
expenses mentioned in paragraph 1 of Article 546 and in
Article 443. The expenses incurred in improvements for pure
luxury or mere pleasure shall not be refunded to the possessor in bad faith; but he may remove the objects for which
such expenses have been incurred, provided that the thing
suffers no injury thereby, and that the lawful possessor does
not prefer to retain them by paying the value they may have
at the time he enters into possession.
COMMENT:
(1) Rights of Possessor in Bad Faith
Regarding possessor’s rights (if in bad faith) to ornamental
expenses, see discussion under the next preceding article.
(2) Query
Suppose the value of the ornament at the time of change of
possession is higher (instead of lower) than the amount spent,
should the possessor in bad faith be paid the higher value?
ANS.: If we follow the letter of the law strictly, he should
be given the higher value but considering the intent of the law
to penalize him, it is submitted that the refund should not
exceed the amount spent, otherwise he is placed in a better
position than the possessor in good faith.
(3) Right of the Possessor (in the Concept of Owner) Regarding FRUITS
(a)
(b)
If in GOOD faith:
1)
Gathered or severed or harvested fruits are his own.
(Art. 544; see also Nacoco v. Geronimo, L-2899, Apr.
29, 1949).
2)
pending or ungathered fruits — (pro-rating between
possessor and owner of expenses, net harvest, and
charges). (See Art. 545).
If in BAD faith:
1)
gathered fruits — must return value of fruits already
received as well as value of fruits which the owner or
544
CIVIL CODE OF THE PHILIPPINES
Art. 550
legitimate possessor (not the possessor in bad faith)
could HAVE received with due care or diligence,
MINUS necessary expenses for cultivation, gathering, and harvesting, to prevent the owner from being
unjustly enriched. (See Arts. 549, 443; Dir. of Lands
v. Abagat, 53 Phil. 147).
2)
pending or ungathered fruits — no rights at all, not
even to expenses for cultivation because by accession,
all should belong to the owner, without indemnity.
(See Art. 449).
[NOTE: The possessor in bad faith is duty
bound to render an accounting of the fruits received
or could have been received (Dir. of Lands v. Abagat,
53 Phil. 147) and must pay damages amounting to
a reasonable rent for the term of his possession.
(Lerma v. de la Cruz, 7 Phil. 581).].
[NOTE: The rule as to fruits does not apply to a
defendant in a forcible entry case where the recoverable damages are the reasonable compensation for
the use and occupation of the premises — the fair
rental value. (See Basia, et al. v. Espada, [CA] 50
O.G. 5896).].
Art. 550. The costs of litigation over the property shall
be borne by every possessor.
COMMENT:
Costs of Litigation
(a)
“Every possessor’’ refers to one in good faith or bad faith,
in the concept of owner or in the concept of holder, in one’s
own name or in that of another, and not to the owner or
the person adjudged by the court to be lawfully entitled
to possess.
(b)
Litigation refers to a court action.
545
Arts. 551-552
CIVIL CODE OF THE PHILIPPINES
Art. 551. Improvements caused by nature or time shall
always inure to the benefit of the person who has succeeded
in recovering possession.
COMMENT:
(1) Improvements Caused by Nature or Time
Neither the possessor in good faith nor in bad faith is
entitled to:
(a)
improvements caused by NATURE (like alluvium,
etc.). (See 4 Manresa 275-276).
(b)
improvements caused by TIME (like the improved
flavor of wine).
(2) Reason for the Law
These accrue to the owner or legitimate possessor, so no
reimbursement occurs.
Art. 552. A possessor in good faith shall not be liable for
the deterioration or loss of the thing possessed, except in
cases in which it is proved that he has acted with fraudulent
intent or negligence, after the judicial summons.
A possessor in bad faith shall be liable for deterioration
or loss in every case, even if caused by a fortuitous event.
COMMENT:
(1) Liability for Loss or Deterioration
This article deals with liability for LOSS or DETERIORATION. It should be noted that the law is more strict with
the possessor in bad faith (bad faith from the beginning) than
with a possessor in good faith who becomes in bad faith upon
receipt of the judicial summons.
(2) Rules Applicable
(a)
Possessor in GOOD FAITH —
546
CIVIL CODE OF THE PHILIPPINES
Art. 553
1)
BEFORE receipt of judicial summons — NOT LIABLE.
2)
AFTER judicial summons
a)
loss or deterioration thru fortuitous event — not
liable.
b)
thru fraudulent intent or negligence — liable
[NOTE: The possessor may become negligent or
indifferent for he may sense that after all, he
may lose the case.].
(b)
Possessor in BAD FAITH —
Whether before or after judicial summons, and
whether due to fortuitous event or not, such possessor is
LIABLE.
(3) Illustrative Examples
(a)
Possessor in good faith burnt a house. Later, he received
judicial summons to answer a complaint filed by the lawful owner. Is the possessor liable?
ANS.: No, and therefore he need not reimburse anything. (Art. 552).
(b)
Possessor in bad faith occupied a house. Before judicial
summons, the house was destroyed by a fortuitous event.
Is the possessor liable?
ANS.: Yes, in view of his bad faith, even if a fortuitous event had caused the loss or destruction. (Art.
552).
Art. 553. One who recovers possession shall not be
obliged to pay for improvements which have ceased to exist
at the time he takes possession of the thing.
COMMENT:
Improvements Which Have Ceased to Exist
The Article explains itself.
547
Arts. 554-555
CIVIL CODE OF THE PHILIPPINES
Art. 554. A present possessor who shows his possession
at some previous time, is presumed to have held possession
also during the intermediate period, in the absence of proof
to the contrary.
COMMENT:
Presumption of Possession During Intervening Period
(a)
Example: If in 1951, A possessed the land which he NOW
possesses, it is disputably presumed that he has been in
continuous possession from 1951 up to now.
(b)
The presumption is particularly useful for prescriptive
purposes.
Art. 555. A possessor may lose his possession:
(1)
By the abandonment of the thing;
(2) By an assignment made to another either by onerous or gratuitous title;
(3) By the destruction or total loss of the thing, or because it goes out of commerce;
(4) By the possession of another, subject to the provisions of Article 537, if the new possession has lasted longer
than one year. But the real right of possession is not lost till
after the lapse of ten years.
COMMENT:
(1) Ways of Losing Possession
(a)
(b)
Thru the Possessor’s Voluntary Will and Intent
1)
Abandonment. (Art. 555).
2)
Assignment (onerous or gratuitous conveyance). (Art.
555).
Against the Possessor’s Will
1)
possession of another for more than one year. (Art.
555).
548
CIVIL CODE OF THE PHILIPPINES
(c)
Art. 555
2)
final judgment in favor of another (with a better
right).
3)
expropriation.
4)
prescription in favor of another.
5)
recovery or reivindication by the legitimate owner
or possessor. (See 2 Castan 48).
Because of the Object
1)
destruction or total loss of the thing. (Art. 555).
2)
going out of commerce. (Art. 555).
3)
escaping from possessor’s control of wild animals.
(Art. 560).
(2) ‘Abandonment’ Discussed
(a)
Abandonment is the voluntary renunciation of a thing.
(b)
Requisites:
1)
the abandoner must have been a possessor in the
concept of owner (either an owner or mere possessor
may respectively abandon either ownership or possession). (See 4 Manresa 315).
2)
the abandoner must have the capacity to renounce
or to alienate (for abandonment is the repudiation
of a property right). (See 4 Manresa 315).
3)
there must be a physical relinquishment of the thing
or object. (Yu v. De Lara, L-16084, Nov. 30, 1962).
4)
there must be no more spes recuperandi (expectation
to recover) and no more animus revertendi (intent to
return or get back). (U.S. v. Rey, 8 Phil. 500; Yu v.
De Lara, L-16084, Nov. 30, 1962).
U.S. v. Rey
8 Phil. 500
FACTS: A vessel Cantabria while on its way to
Albay was shipwrecked, resulting among other things in
549
Art. 555
CIVIL CODE OF THE PHILIPPINES
the loss of P25,000; P15,000 of which were later salvaged
by a group of men who distributed the amount among
themselves. The real owner, however, had no knowledge
of the loss till after six weeks, shortly after which period,
searchers were sent. But by that time, the money was
nowhere to be found. ISSUE: Was there abandonment,
and can the money still be recovered from the finders?
HELD: There was no abandonment for the spes
recuperandi had not yet gone, nor the animus revertendi
finally given up. This is evident from the fact that a search
party had looked for the money. Hence, the owner can
still recover, less the necessary expenses for salvaging
the same.
(c)
Additional Doctrines:
1)
A property owner cannot be held to have abandoned
the same until at least he has some knowledge of
the loss of its possession or the thing. (U.S. v. Rey,
supra).
2)
There is no real intention to abandon property when
as in the case of a shipwreck or a fire, things are
thrown into the sea or upon the highway. (U.S. v.
Rey, supra; see 4 Manresa 315).
3)
An owner may abandon possession merely, leaving
ownership in force, but a mere possessor cannot
abandon ownership since he never had the same.
4)
If an owner has not lost possession because there has
been no abandonment, it surely cannot be acquired
by another thru acquisitive prescription. Thus, the
mere fact that land is covered by the sea completely
during high tide for failure in the meantime of the
owner to dam the water off, does not indicate an
abandonment of the land in favor of public dominion.
(See Aragon v. Insular Gov’t., 19 Phil. 223). Moreover, abandonment can hardly refer to land much less
to registered land. (See Yu v. De Lara, L-16804, Nov.
30, 1962).
550
CIVIL CODE OF THE PHILIPPINES
5)
Art. 555
There is no abandonment if an owner merely tolerated (permitted) another’s possession, nor if the
latter was done by stealth or effected thru force and
intimidation. (Arts. 537, 558).
[NOTE: “What is difficult is the tracing of the
dividing line between tolerance of and abandonment by, the owner of his rights, when the acts of
the holder are repeated, and much more so when
time lapses affirming and consolidating a relation
which may be doubted whether or not the same was
legitimate in its origin. Whether there was license or
permission is most difficult to determine. The judges
and the courts will have to decide whether or not, in
each particular case, there has been mere tolerance,
or a true abandonment of the right on the part of
the owner.’’ (4 Manresa).].
6)
There is no abandonment of movables even if there
is temporary ignorance of their whereabouts, so long
as they remain under the control of the possessor
(that is, so long as another has not obtained control
of them). (Art. 556; see also 3 Sanchez Roman 461;
4 Manresa 323).
7)
In true abandonment, both possession de facto and
de jure are lost. (See Bishop of Cebu v. Mangaron, 6
Phil. 286).
8)
Abandonment which converts the thing into res nullius (ownership of which may ordinarily be obtained
by occupation), does not apply to land. (See Art. 714,
Civil Code). Much less does abandonment apply to
registered land. (See Sec. 46, Act 496; Yu v. De Lara,
L-16084, Nov. 30, 1962).
(3) Assignment
(a)
Assignment as used in the article means the complete
(not merely a limited) transmission of ownership rights
to another person, onerously (as when a thing is sold and
delivered) or gratuitously (as in the case of a donation).
551
Art. 555
CIVIL CODE OF THE PHILIPPINES
(b)
While in assignment, at no time did the thing not have a
possessor (for possession merely changed hands or control); in abandonment, there was a time, no matter how
short, when the object did not have any possessor at all.
(See 4 Manresa 315). Moreover, while assignment may in
some cases be by onerous title, abandonment is always
gratuitous, otherwise it becomes a virtual assignment.
(c)
In assignment, both possession de facto and de jure are
lost, and no action will allow recovery. (Bishop of Cebu v.
Mangaron, 6 Phil. 286; see also 4 Manresa 321).
(4) Possession of Another
(a)
If a person is not in possession for more than one year
(but less than 10 years), he loses possession de facto (possession as a fact). This means that he can no longer bring
an action of forcible entry or unlawful detainer, since the
prescriptive period is one year for such actions. (Bishop of
Cebu v. Mangaron, 6 Phil. 286). Moreover, “constructive
possession” is also lost. (See Leola v. Ibañez, 48 O.G. 2811).
But he may still institute an accion publiciana (for the
better right of possession) to recover possession de jure
possession as a legal right, or the real right of possession.
(See Rodriguez v. Taino, 16 Phil. 301).
(b)
If a person loses possession for more than 10 years, he
loses possession de jure, or the real right of possession.
(See Art. 555). An accion publiciana or reivindicatoria is
still possible unless prescription, either ordinary or extraordinary, has set in. (See Rodriguez v. Taino, supra).
Caballero v. Abellana
15 Phil. 534
FACTS: A tenant share-cropper delivered to the
landowner half of the harvest till 1904. For the next two
years, however, the cropper failed not only to give the
owner’s share but also to surrender the possession of the
premises. When sued by the owner for recovery of the
land’s possession as well as for his legitimate share of
552
CIVIL CODE OF THE PHILIPPINES
Art. 556
the products, the cropper pleaded in defense his two-year
possession of the property.
HELD: The cropper must still surrender the possession of the land and deliver the owner’s share of the
crops since the issue here is not possession de facto but
possession de jure.
(5) Destruction, Total Loss, and Withdrawal from Commerce
(a)
A thing is lost when it perishes, or goes out of commerce,
or disappears in such a way that its existence is unknown,
or it cannot be recovered. (Art. 1189).
(b)
Partial loss in general results only in the loss of possession of the part lost, although the rule in obligations and
contracts is that “the courts shall determine whether,
under the circumstances, the partial loss of the object of
the obligation is so important as to extinguish the obligation.” (Art. 1264).
(c)
If by the erosive action of the sea, it is essential for a
landowner to set up a barrier or retaining wall to prevent
his land from being covered at high tide, this necessity
by itself constitutes as yet no loss. (See Aragon v. Insular
Gov’t., 19 Phil. 223).
(6) Reference of Article to Both Real and Personal Property
Does Art. 555 refer to both real and personal property?
ANS.: Yes (for the law does not distinguish) except in
the case of paragraph 4, for it is evident that the reference to
possession of more than one year concerns only real property,
the rule as to movable property being explicitly stated in Art.
556. (infra.).
Art. 556. The possession of movables is not deemed
lost so long as they remain under the control of the possessor, even though for the time being he may not know their
whereabouts.
553
Art. 557
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) When Possession of Movables is Lost or Not Lost
If the possessor has no idea at all about the whereabouts
of the movable, possession is lost, but not when he more or less
knows its general location, though he may not know its precise
or definite location. In the former, he has lost juridical control;
in the latter, the object remains within his patrimony (not in
the patrimony of another). (See 4 Manresa 323; 3 Sanchez Roman 461).
(2) Example
The moment my lost Mont Blanc pen is found by another,
I have lost its possession, for the finder now has juridical control
over it (See Arts. 599 and 719) and unless the finder returns
it to me or to the mayor (Art. 719) or to the police authorities,
he is guilty of the crime of theft, regardless of whether or not
he knows the identity of owner. (See People v. Silverio, 43 O.G.
2205).
Art. 557. The possession of immovables and of real rights
is not deemed lost, or transferred for purposes of prescription to the prejudice of third persons, except in accordance
with the provisions of the Mortgage Law and the Land Registration Laws.
COMMENT:
(1) Loss of Immovables With Respect to Third Person
This refers to possession of real property, and other real
rights over real property (like easement or usufruct).
(2) Example
I bought a parcel of land (without a Torrens Title) and
registered the deed of sale in the Registry of Property. If I
leave my land and another possesses the same for the required
period, I have lost my possession and ownership over the same,
insofar as the occupier is concerned, but not insofar as other
554
CIVIL CODE OF THE PHILIPPINES
Arts. 558-559
people (strangers) are concerned. For said strangers, relying
on the Registry, are still privileged to consider me possessor
and owner.
Art. 558. Acts relating to possession, executed or agreed
to by one who possesses a thing belonging to another as a
mere holder to enjoy or keep it, in any character, do not bind
or prejudice the owner, unless he gave said holder express
authority to do such acts, or ratifies them subsequently.
COMMENT:
Acts of Mere Holder
The Article explains itself.
Art. 559. The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has
lost any movable or has been unlawfully deprived thereof,
may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner
has been unlawfully deprived, has acquired it in good faith
at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.
COMMENT:
(1) When Possession of a Movable is Equivalent to Title
Possession of movable property acquired
(a)
in BAD FAITH — is never equivalent to title
(b)
in GOOD FAITH —
1)
D is equivalent to a title — as a general rule. (Hence,
the owner, if he wants to get it back, must REIMBURSE).
2)
is NOT equivalent to title (as the exception to the
rule) when the owner had LOST it or had been UNLAWFULLY DEPRIVED of it (as when it has been
555
Art. 559
CIVIL CODE OF THE PHILIPPINES
stolen), UNLESS the possessor had acquired it in
good faith at a “public sale” (an auction sale, where
the public had properly been notified). (See U.S. v.
Soriano, 12 Phil. 512).
[NOTE: This last case is considered an exception to the exception, and is therefore considered as
somewhat equivalent to a title, that is even if the
property had been stolen from the owner, he must,
if he desires to get it back, still reimburse the possessor who had acquired it in good faith at a public
sale. It is not however exactly a title, for the owner
has still the right to reimburse. (Art. 559, par. 2).].
(2) Example
(a)
If I am in possession of a Rolls Royce automobile, having
acquired it in good faith from the seller (who thought he
owned it), I am considered entitled to said automobile,
with an actual title that can be defeated only by the true
owner. The true owner can get the car back only if he will
reimburse me the price I had paid for the car.
[NOTE:
1)
My title is not that of an absolute owner but one that
can be defeated only by the true owner who gives
reimbursement.
2)
While I am not yet the absolute owner, my possession may eventually ripen into full ownership thru
acquisitive prescription (4 years in this case for I
have GOOD FAITH, and my just title is given by Art.
559, unlike in the case of REAL PROPERTY, where
my just title must be proved for purposes of prescription). (See Sotto v. Enage, 43 O.G. 5057; Manresa).
Should I acquire ownership by prescription, I cannot
be compelled to give up the car’s ownership, even if
a refund is offered to me. (Sotto v. Enage, supra).
3)
It is necessary of course that my possession be in the
concept of owner (4 Manresa 339), and that the true
556
CIVIL CODE OF THE PHILIPPINES
Art. 559
owner had not lost the property nor been unlawfully
deprived of it. (Art. 559, see also 4 Manresa 339).].
(b)
I purchased in good faith a stolen automobile. The owner
now wants to get it back, but does not want to reimburse
me the price I had paid. Will the owner prevail?
ANS.: Yes, because although my possession was in
good faith, still it is not equivalent to title for the owner
had been unlawfully deprived of his car. Hence, the owner
can get it back without reimbursing me. (See Tuason and
Sampedro, Inc. v. Geminea, [CA] 46 O.G. 1113, Mar.,
1950).
(c)
I purchased in good faith at an auction sale a stolen automobile. Can the owner get it back without reimbursing
me for the price I paid?
ANS.: The owner can get it back, but I should first
be refunded the price I paid since my purchase had been
made in good faith, at a public auction or sale. (Art. 559,
2nd paragraph).
(3) Some Definitions
(a)
Acquired in “good faith’’ — the possessor is of the “belief
that the person from whom he received the thing was
its owner and could transfer valid title thereto.’’ (Art.
1127).
(b)
“title” — the juridical act transferring or conferring ownership; and not a document. (See 4 Manresa 399).
(c)
“lost’’ — missed or misplaced.
(d)
“unlawfully deprived” — taken by another thru a crime
such as theft, robbery, estafa. Under the Revised Penal
Code, the object of the crime must be restored even though
it be found in the possession of a third person who has
acquired it by lawful means, saving to the latter his action against the proper person who may be liable to him.
(Art. 105, par. 2, RPC).
Query: If a depositary of a car sells the car to an innocent purchaser for value, may the depositor-owner recover
the same from the buyer without reimbursement?
557
Art. 559
CIVIL CODE OF THE PHILIPPINES
ANS.: It would seem that the answer is yes, because
in selling the car, the depositary committed estafa, and
there is no doubt that the car is an object of the crime. (See
Arenas v. Raymundo, 19 Phil. 47; Art. 105, par. 2, RPC;
see likewise De Garcia v. Court of Appeals, 37 SCRA 129
and Dizon v. Suntay, L-30817, Sep. 29, 1972, 42 SCRA
169). However, when no crime is committed but only a
civil liability arises (as when a buyer who had not yet
paid for the goods should sell them to another who is in
good faith, the seller cannot recover from the third person
the goods, for here there was neither a “losing’’ nor an
“unlawful (criminal) deprivation.’’ (See Asiatic Commercial Corporation v. Ang, et al., Vol. 40, O.G. S. No. 15, p.
102).
Asiatic Commercial Corporation v. Ang, et al.
Vol. 40, O.G. S. 15, p. 102
FACTS: A sold Gloco Tonic to B, delivered the tonics to B, but was not able to collect the price, B later on
sold the goods to C, an innocent purchaser. Is A allowed
to recover the goods from C on the ground that B had not
yet paid the price to him (A)?
HELD: No, for here there was no criminal or illegal
deprivation, the nonpayment of the price being immaterial insofar as the right to recover the goods from C is
concerned.
Dizon v. Suntay
L-30817, Sep. 29, 1972
FACTS: The owner of a diamond ring entrusted same
to Clarita Sison for the latter to sell upon promise of a
commission. Instead of selling, Clarita pledged the ring
with a pawnshop. As soon as he learned of the pledge,
the owner tried to get back the ring from the pawnshop
owner, but the latter refused.
ISSUE: Can the owner successfully get back the
ring? If so, does the owner have to pay the pawnshop
owner the amount borrowed by Clarita?
558
CIVIL CODE OF THE PHILIPPINES
Art. 559
HELD: Under Art. 559 of the Civil Code, the owner
can successfully get back the ring, and he does not have to
reimburse the pawnshop owner the money lent to Clarita.
This is because the ring owner had been “unlawfully deprived” of the same, and this right to recover cannot be
defeated even if the pawnshop had acquired possession
of the ring in good faith.
(4) Summary of Recovery or Non-Recovery Principle
(a)
(b)
Owner MAY RECOVER WITHOUT REIMBURSEMENT:
1)
from possessor in bad faith.
2)
from possessor in good faith (if owner had LOST the
property or been unlawfully deprived of it) (the acquisition being from a private person). (Art. 559).
Owner MAY RECOVER but should REIMBURSE:
1)
(c)
if possessor acquired the object in good faith at a
PUBLIC SALE or AUCTION. (Art. 559). [Because
the publicity attendant to a public sale should have
been sufficient warning for the owner to come forward and claim the property. (Manresa).].
Owner CANNOT RECOVER, even if he offers to REIMBURSE (whether or not the owner had lost or been
unlawfully deprived):
1)
if possessor had acquired it in good faith by purchase
from a merchant’s store, or in fairs, or markets in
accordance with the Code of Commerce and special
laws. (Art. 1505, Civil Code, see also Arts. 85, 86,
Code of Commerce).
2)
if owner “is by his conduct precluded from denying the
seller’s authority to sell.” (ESTOPPEL). (Art. 1505).
3)
if possessor had obtained the goods because he was
an innocent purchaser for value and holder of a NEGOTIABLE document of title to the goods. (See Art.
1518).
559
Art. 559
CIVIL CODE OF THE PHILIPPINES
(5) Cases and Bar Questions
Rebullida v. Bustamante
(CA) 45 O.G. 17, Supp. 5, May, 1949
FACTS: Rebullida owned a platinum ring kept in a
vault of the “La Estrella del Norte,” but one day, the ring
was stolen and found in the possession of Bustamante,
who in good faith had purchased it from a passing peddler,
Gargantilla. Can Rebullida get back the ring without the
necessity of reimbursement?
HELD: Yes, since the stolen ring had been acquired
(though in good faith) at a private sale, and not a public
one. There is thus no need of any REFUND of the purchase
price. This action for REPLEVIN will therefore PROSPER.
United States v. Sotelo
28 Phil. 147
If A entrusts money to B who later gives the same to
C, an innocent recipient for value, A, cannot recover the
money (or negotiable document) from C since money ordinarily does not bear the earmarks of particular ownership.
BUT if instead of money, the object had been an identifiable
one, then recovery can be had for C had acquired same from
someone (B) who had no authority to dispose of the same.
And such recovery does not need reimbursement. C should
require the indemnity from B and not A.
Arenas v. Raymundo
19 Phil. 47
FACTS: A asked B to sell jewelry. B instead of selling, borrowed money from a pawnshop, and as security,
pledged the jewelry. After B was convicted of ESTAFA,
A asked the pawnshop for the jewels, but the pawnshop
refused to give them up unless A first pay the amount
lent by the pawnshop to B.
HELD: A can get the jewels without giving to the
pawnshop the money borrowed by B because in the first
560
CIVIL CODE OF THE PHILIPPINES
Art. 559
place, the pledge was not valid (not having been done by
the owner or his duly authorized agent); in the second
place, there is no contractual relation between A and the
pawnshop; in the third place, A had been illegally deprived
of the jewels; and finally it would be unjust and unfair to
the owner (A) considering the fact that ordinarily, most
pawnshops do not require their customers to first prove
their ownership of the objects being pledged.
U.S. v. Soriano
12 Phil. 512
The mere registration of a sale (such as that of large
cattle) does not make the sale a PUBLIC SALE as referred
to in Art. 559, for a public sale is one where after due
notice to the public, bidders are allowed to bid for the
objects they desire to purchase.
Tuason and Sampedro, Inc. v. Geminea
(CA) 46 O.G. 1113, Mar. 1950
FACTS: A owned a truck, which was later commandeered by the Japanese Army. After liberation, A
discovered the truck in the possession of B, who alleged
that he had purchased it from X. When A asked for the
return of the truck to him, B alleged in defense:
1)
that he (B) should be considered the owner because his possession of the movable had been
in good faith;
2)
that the property had neither been LOST by,
nor STOLEN from A.
HELD: A is entitled to get the truck without necessity of reimbursing B for the purchase price given B to
X.
Because:
1)
ownership of the truck remained with A. While
it is true that possession of a movable in good
faith is equivalent to a title, still it is not ab561
Art. 559
CIVIL CODE OF THE PHILIPPINES
solute title by itself, and the true owner may
recover the property from the possessor.
2)
it cannot be denied that the commandeering of
the truck was an unlawful deprivation suffered
by A. Since the acquisition by B was not thru a
public sale, it follows that A can recover without the necessity of reimbursing B the purchase
price paid by the latter.
BAR
X was the owner of a motor vessel which the
Japanese Army confiscated during the occupation of the
Philippines. After the liberation, the U.S. Armed Forces
found the said vessel and sold it as enemy property to Y.
An action is now filed by X against Y for the recovery of
the vessel, plus damages. Will the action prosper? State
reasons for your answer.
ANS.: The action will prosper. While the Japanese
Army had the right to get the motor vessel, still it was
under an obligation to restore it at the conclusion of
peace, and to pay indemnities therefor. (Art. 53, Regulations Respecting the Laws and Customs of War on Land,
Appended to the Hague Convention of 1907). The title to
the vessel did NOT therefore pass to the Japanese Army,
but remained with X. The vessel cannot consequently be
considered as enemy property, and was not such when it
was found by the U.S. Armed Forces and sold to Y. The
sale cannot be considered valid as against X. (Placido
Noveda v. Escobar, L-2939, Aug. 29, 1950).
Chua Hai v. Hon. Kapunan and Ong Shu
L-11188, June 30, 1958
FACTS: Soto bought from Ong Shu several galvanized iron sheets. Soto paid with a check, which was subsequently dishonored by the bank. Later, Soto sold some
of said sheets to an innocent purchaser Chua Hai. Soon
after, Soto was prosecuted for estafa. While the criminal
562
CIVIL CODE OF THE PHILIPPINES
Art. 559
case was pending, the iron sheets were taken by the police. Ong Shu, the original seller, then petitioned for the
return to him of the sheets. To this petition, Chua Hai
objected, but the trial court granted the petition for Chua
Hai’s failure to put up a bond, and so Ong Shu recovered
the sheets. ISSUE: Was the return to Ong Shu of the iron
sheets proper?
HELD: No, for the following reasons:
1)
Chua Hai, the acquirer and possessor in good faith of
the sheets, is entitled to be respected and protected
in his possession as if he were the true owner thereof, until ruled otherwise by a competent court.
2)
Being considered in the meantime as the true owner,
Chua Hai cannot be required to surrender possession, nor be compelled to institute an action for the
recovery of the goods, whether or not there is an
indemnity bond.
3)
The mere filing of a criminal charge, that the chattel had been illegally obtained thru estafa from its
true owner by the transferor or the possessor does
not warrant disturbing the possession of the chattel
against the will of the possessor; this is so because
the mere filing of an estafa complaint is no proof that
estafa had in fact been committed.
4)
Under Article 1505, recovery is denied even if the
former owner was deprived of his chattels thru
crime, where the purchase is made in merchant’s
stores, or in fairs, or markets.
5)
The judge taking cognizance of the criminal case
against the vendor of the possessor in good faith
has no right to interfere with the possession of the
latter, who is not a party to the criminal proceedings, and such unwarranted interference is not made
justifiable by requiring a bond to answer for damages
caused to the possessor.
563
Art. 559
CIVIL CODE OF THE PHILIPPINES
BAR
A agreed to sell his car to B for P200,000, the price to
be paid after the car is registered in the name of B. After the
execution of the deed of sale, A together with B, proceeded to
the Land Transportation Office (formerly, Motor Vehicles Office) where the registration of the car in B’s name was effected.
When A asked for payment, B told him that he was P10,000
short, and informed him that he would get from his mother.
Together, A and B rode in the car to the supposed residence
of B’s mother. Upon entering the house, B told A to wait in
the sala while he asked his mother for the money. In the
meanwhile, on the pretext that B had to show his mother the
registration papers of the car, A gave them to B, who thereupon
entered the supposed room of his mother, ostensibly to show
her the papers. That was the last time A saw B or his car. In
the meantime, B succeeded in selling the car to C who bought
the same in good faith and for value. Question: May A recover
the car from C? Reasons.
ANS.: A may successfully recover the car of C because
despite C’s good faith, and despite the registration of the
car in B’s name, still A had been unlawfully deprived of it.
Consequently, A can recover the car, and he does not have to
reimburse anything to C. The doctrine of caveat emptor (let
the buyer beware) can apply here. C’s remedy would be to go
against B, his seller. The principle in common law that where of
two innocent persons defrauded by a stranger, the person who
makes possible the fraud by a misplaced confidence should suffer — cannot be applied in this problem because of the express
provisions of Art. 559. (See Jose B. Aznar v. Rafael Yapdiangco,
L-18536, Mar. 31, 1965).
(6) Possession of Stolen Property
Suppose recently stolen property is found in possession
of A, is A presumed to be the thief?
ANS.: Yes, it is a disputable presumption “that a person
found in possession of a thing taken in the doing of a recent
wrongful act is the taker and doer of the whole act.’’ (Rule 131,
Sec. 3[j], Rules of Court). It is true that one who possesses a
564
CIVIL CODE OF THE PHILIPPINES
Art. 559
movable, acquired in good faith, has what is called an equivalent of title, but this is destroyed when it is proved that said
movable belongs to somebody else who has lost it, or has been
unlawfully deprived of its possession. (See Art. 559).
(7) Purpose of Art. 559
“For the purpose of facilitating transaction on movable
property which are usually done without special formalities,
this article establishes not only a mere presumption in favor of
the possessor of the chattel, but an actual right, valid against
the true owner, except upon proof of loss or illegal deprivation.’’
(Sotto v. Enage, 43 O.G. 17, p. 5075).
(8) How to Contest the Title of a Possessor in Good Faith
In order to contest the title of the possessor in good faith,
what should the true owner do?
ANS.: The true owner should present sufficient proof of
the identity of the object AND that he had either lost it or has
been illegally deprived of it. This proof is an indispensable
requisite a conditio sine qua non in order that the owner of the
chattel may contest the apparent title of its possessor. Without
adequate proof of such loss or illegal deprivation, the present
holder cannot be put on his defense, even if as possessor he has
no actual proprietary title to the movable property in question.
(Sotto v. Enage, supra; Rebullida v. Bustamante, [CA] 45 O.G.
5 [S], p. 17).
(9) Rule When Possessor Has Already Become the Owner
Art. 559 in fact assumes that the possessor is as yet not
the owner, for it is obvious that where the possessor has come
to acquire indefeasible title, let us say adverse possession for
the necessary period, no proof of loss, or illegal deprivation
could avail the former owner of the chattel. He would no longer
be entitled to recover it under any condition. (Sotto v. Enage,
supra).
[NOTE: The abovementioned rule is still in force. However, if the possessor is himself the criminal who had stolen
or taken said property, there can never be any prescription
565
Art. 560
CIVIL CODE OF THE PHILIPPINES
in his favor (See Art. 1133), otherwise we would be allowing
a “wrong and perverse” thing to continue. (See Report of the
Code Commission, p. 129).].
Art. 560. Wild animals are possessed only while they
are under one’s control; domesticated or tamed animals are
considered domestic or tame, if they retain the habit of returning to the premises of the possessor.
COMMENT:
(1) Possession of Wild Animals
One’s possession of wild animals is lost when they are
under ANOTHER’S control or under NO ONE’S control (as
when they have regained their NATURAL FREEDOM and have
become res nullius). Reason: Possession of them was possible
only when power or force could be exercised over them. Eliminate that control, and you eliminate possession automatically.
(4 Manresa).
(2) Domesticated or Tamed Animals
Wild animals which have become tame and now generally submit to man’s control are called DOMESTICATED and
TAMED animals.
Rules:
(a)
The possessor does not lose possession of them — AS
LONG AS habitually they return to the possessor’s
premises. (Art. 560).
(b)
Impliedly, possession of them is lost if the aforementioned habit has ceased. (But insofar as OWNERSHIP is concerned, Art. 716 applies. It says:
“The owner of domesticated animals may claim
them within twenty days, to be counted from their
occupation by another person. This period having
expired [without the claim having been made], they
shall pertain to him who has CAUGHT and KEPT
them.”).
566
CIVIL CODE OF THE PHILIPPINES
Art. 560
Ciriaco Landa v. Francisco Tobias, et al.
L-24490, May 29, 1968
FACTS: On June 23, 1962, defendants Juanito Pecate
and Juanito Alfaro, members of the police force of Cabatuan,
Iloilo, purporting to act pursuant to Sec. 538 of the Revised
Adm. Code, seized from plaintiff Ciriaco Landa, a carabao, for
which he produced a Certificate of Ownership in the name of
Pantaleon Elvas. Said peace officers turned over the carabao
to the municipal treasurer, who on July 25, 1962, upon the
authority of Sec. 540 of said Code, sold the animal at public
auction, which was duly approved by the Provincial Board on
July 26, 1963. In an affidavit dated July 25, 1962, Landa tried
to explain that he had acquired the carabao by barter with an
older carabao from Marcelino Mayormente. On Apr. 16, 1963,
Landa commenced this action against the peace officers and
other officials for damages on the ground that he had been
wrongfully deprived of the possession of the carabao. He alleged
among other things that while he could not produce a transfer
certificate concerning the carabao (as required by the Revised
Administrative Code), still under Art. 1356 of the Civil Code,
a contract is obligatory in whatever form it may have been
entered into provided that all the essential requisites for its
validity are present.
HELD: Landa cannot recover damages because of the
following reasons:
(a)
While ordinarily, no special form is needed for a contract,
still, in this particular case of transfer of title to cattle,
the Rev. Adm. Code prescribes an additional requisite,
namely, the registration of said transfer and the issuance
to the transferee of the corresponding certificate of transfer. (See Sec. 529 of the Rev. Adm. Code). This certificate
was not produced. In fact he could not have produced such
certificate, for the carabao was allegedly conveyed to him
by Marcelino Mayormente, whereas the registered owner
is Pantaleon Elvas — and the plaintiff knew this fact and
there is no competent proof that Elvas had ever assigned
the carabao to Mayormente.
(b)
The policemen had reasonable grounds to suspect that
plaintiff’s possession of the carabao was unlawful, as
567
Art. 561
CIVIL CODE OF THE PHILIPPINES
well as to seize the animal and deliver the same to the
municipal treasurer.
(c)
The municipal treasurer had, not only the authority, but
also the DUTY to issue, post, and cause to be served a
notice of the seizure, or taking of said animal, and if the
owners thereof “fail to present themselves within the time
specified in the notice and prove title to the animals taken
or seized as aforesaid,” notice of such fact shall be given
by said officer to the provincial board “which shall order
said animals to be sold at public auction,” after giving the
notice prescribed in said legal provision. The “purchaser
at such sale shall” in the language of Sec. 540 “receive a
good and indefeasible title to the animal sold.”
(d)
Even if plaintiff were hypothetically the true owner of
the carabao in question, his only remedy was to claim
it before the municipal treasurer and prove to the latter
his (the plaintiff’s) title, either prior to or at the time of
the auction sale. Not having done so, plaintiff cannot
now make such claim judicially and try to prove his title
— which after all, he has failed to establish — much less
seek indemnity from the public officers who, by reason of
their official duties, had a hand in the seizure and sale
of the carabao.
(e)
Regarding the allegation that the carabao was not found
stray, the fact is, although the animal was not really
stray, still Sec. 540 refers not only, to stray animals
but also to “all animals recovered from thieves or taken
by peace officers from persons unlawfully or reasonably
suspected of being unlawfully in possession of the same
— the owners of which fail to present themselves within
the time fixed in the notice and prove the title to the
animals taken or seized.”
Art. 561. One who recovers, according to law, possession
unjustly lost, shall be deemed for all purposes which may
redound to his benefit, to have enjoyed it without interruption.
568
CIVIL CODE OF THE PHILIPPINES
Art. 561
COMMENT:
(1) Lawful Recovery of Possession that Had Been Unjustly
Lost
Example: If on Mar. 1, 2002 I bought a diamond ring, and
the ring was subsequently stolen Apr. 1, 2002 but I was able
to lawfully recover it on May 1, 2003, then I am supposed to
have possessed the ring continuously from Mar. 1, 2002 up to
now, for all purposes that may redound to my benefit (as in
the case of acquisitive prescription).
Bishop of Cebu v. Mangaron
6 Phil. 286
FACTS: The City of Manila unjustly deprived X of his
possession of a piece of land. After a few years, X forced his
way into the premises instead of applying to the proper authorities. Should the intervening years be counted so as to give X
uninterrupted possession of the land?
HELD: No, because X’s recovery was not had “according
to the law.” Recovery according to law does not mean taking
the law into one’s own hands BUT thru the proper writs and
actions or with the aid of the competent authorities. (See also
4 Manresa 356).
(2) Applicability of Article only if Beneficial
Art. 561 applies to BOTH possessors in GOOD and in BAD
faith, but only if BENEFICIAL to them. Thus, a possessor in
GOOD faith, for the purpose of prescription can make use of
this article. But a possessor in BAD faith is not required to return the fruits which the owner could have received during the
period of interruption, for to impose this duty would prejudice,
not benefit, said possessor. (See 4 Manresa 356).
569
CIVIL CODE OF THE PHILIPPINES
Title VI. — USUFRUCT
Chapter 1
USUFRUCT IN GENERAL
Art. 562. Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise
provides.
COMMENT:
(1) Three Fundamental Rights Appertaining to Ownership
Ownership really consists of three fundamental rights:
(a)
jus disponendi (right to dispose)
(b)
jus utendi (right to use)
(c)
jus fruendi (right to the fruits)
[NOTE: The combination of the latter two (jus utendi and
fruendi) is called USUFRUCT (from the term “usufructus”). The
remaining right (jus disponendi) is really the essence of what
is termed “naked ownership.”].
Hemedes v. CA
113 SCAD 799, 316 SCRA 347
(1999)
In a usufruct, only the jus utendi and jus fruendi over
the property is transferred to the usufructuary — the owner
of the property maintains the jus disponendi or the power to
alienate, encumber, transform, and even destroy the same.
For instance, the annotation of usufructuary rights in
a certificate of title in favor of another does not impose upon
570
CIVIL CODE OF THE PHILIPPINES
Art. 562
the mortgagee the obligation to investigate the validity of its
mortgagor’s title.
(2) Formulae
(a)
Full ownership equals Naked ownership plus Usufruct.
(b)
Naked ownership equals Full ownership minus Usufruct.
(c)
Usufruct equals Full ownership minus Naked ownership.
(3) Concept and Definition of ‘Usufruct’
(a)
Usufruct is the right to enjoy the property of another, with
the obligation of preserving its form and substance, unless
the title constituting it or the law provides otherwise. (Art.
562).
(b)
Usufruct is a “real right, of a temporary nature, which
authorizes its holder to enjoy all the benefits which result
from the normal enjoyment (or exploitation) of another’s
property, with the obligation to return, at the designated
time, either the same thing, or in special cases, its equivalent.” (De Buen, Derecho Comun, p. 225). (It includes
BOTH the jus utendi and the jus fruendi). (Eleizegui v.
Manila Lawn Tennis Club, 2 Phil. 309).
(4) Characteristics or Elements of Usufruct
(a)
ESSENTIAL characteristics (those without which it cannot be termed USUFRUCT):
1)
It is a REAL right (whether registered in the Registry of Property or not). (See 2 Navarro Amandi
199-200).
2)
It is of a temporary nature or duration (not perpetual,
otherwise it becomes emphyteusis). (See De Buen’s
Definition).
3)
Its purpose is to enjoy the benefits and derive all
advantages from the object as a consequence of
NORMAL USE or EXPLOITATION. (See De Buen’s
Definition).
571
Art. 562
(b)
CIVIL CODE OF THE PHILIPPINES
NATURAL characteristic or element (that which ordinarily is present, but a contrary stipulation can eliminate it
because it is not essential).
The obligation of CONSERVING or PRESERVING
the FORM AND SUBSTANCE (value) of the thing. (Example: a swimming pool must be conserved as a swimming
pool.)
[This obligation being merely a natural requisite,
the title or the law may provide otherwise (Art. 562), giving rise to what is known as the abnormal or imperfect
or irregular usufruct such as the usufruct over STERILE
animal.].
[NOTE: Stated otherwise, the requisites of usufruct
are:
(c)
1)
The essential — the real, temporary right to
enjoy another’s property.
2)
The natural — the obligation to preserve its
form or substance. (4 Manresa 322).].
ACCIDENTAL characteristics or elements (those which
may be present or absent depending upon the stipulation
of the parties).
Examples:
1)
whether it be a pure or a conditional usufruct;
2)
the number of years it will exist;
3)
whether it is in favor of one person or several,
etc.
(5) Reasons for CONSERVING Form and Substance
(a)
to prevent extraordinary exploitation;
(b)
to prevent abuse, which is frequent;
(c)
to prevent impairment.
(See Memorandum of the Code Commission, Feb. 17,
1951).
572
CIVIL CODE OF THE PHILIPPINES
Art. 562
(6) Object of Usufruct
(a)
may be real or personal property. (Thus, there can be a
usufruct over an automobile or over money). (See Alunan
v. Veloso, 32 Phil. 545).
(b)
may be sterile or productive (fruitful things). (Thus, there
can be a usufruct over sterile animals.) (See Art. 591).
(c)
may be created over a right (as long as it is not strictly
personal or intransmissible, and as long as it has an
independent existence). (Thus, there can be no usufruct
over an easement, for the latter has no independent existence.).
(7) Rights of Action Available to Usufructuary
Rights of action available to usufructuary (the person
entitled to the usufruct):
(a)
action to protect the usufruct itself;
(b)
action to protect the exercise of the usufruct. (See 4
Manresa 269).
(8) ‘Usufruct’ Distinguished from ‘Easements’ (Servitudes)
USUFRUCT
EASEMENT
(a)
The object here may be
real or personal property.
(b)
What can be enjoyed here
are ALL uses and fruits
of the property.
(c)
A usufruct cannot be constituted on an easement;
but it may be constituted
on the land burdened by
an easement.
(d)
Usually extinguished by
death of usufructuary.
573
(a) This involves only real
property.
(b) Easement is limited to a
particular use (like the
right of way).
(c) An easement may be
constituted in favor of, or
burdening, a piece of land
held in usufruct.
(d) Not extinguished by the
death of the owner of the
dominant estate.
Art. 562
CIVIL CODE OF THE PHILIPPINES
(9) Similarities Between a Usufruct and an Easement
(a)
Both are real rights, whether registered or not.
(b)
Both rights may be registered, provided that the usufruct
involves real property. All easements of course concern
real property. (Thus, a usufruct over personal property
though a real right, cannot be registered because it is a
real right over personal property).
(c)
Both may ordinarily be alienated or transmitted in accordance with the formalities set by law.
(10) ‘Usufruct’ Distinguished from ‘Lease’
BASIS
USUFRUCT
LEASE
1. as to EXTENT
1. covers all fruits 1. generally covers
and uses as a
only a particular
rule
or specific use
2. as to NATURE
of the right
2. is always a real 2. is a real right only
right
if, as in the case of
a lease over REAL
PROPERTY, the
lease is REGISTERED, or is for
MORE THAN
ONE YEAR, otherwise, it is only a
personal right
3. as to the CREATOR of the
right
3. can be creat- 3. the lessor may or
may not be the
ed only by the
owner (as when
owner, or by a
there is a sublease
duly authorized
or when the lessor
agent, acting
is only a usufrucin behalf of the
tuary)
owner
4. as to ORIGIN
4. may be created 4. may be created as
a rule only by conby law, contract,
last will, or pretract: and by way of
574
CIVIL CODE OF THE PHILIPPINES
Art. 562
scription. (Art.
563).
exception by law
(as in the case of
an implied new
lease, or when a
builder has built
in good faith on
the land of another a building,
when the land
is considerably
worth more in
value than the
building, etc.).
(See Art. 448).
5. as to CAUSE
5. The owner is more 5. The owner or lessor is more or
or less PASSIVE,
less ACTIVE,
and he ALLOWS
and he MAKES
the usufructuary
the lessee enjoy
to enjoy the thing
— hace gozar.
given in usufruct
— “deja gozar.”
6. a s t o
PAIRS
6. The usufructuary 6. The lessee genhas the duty to
erally has no
make the ordiduty to pay for
nary repairs.
repairs.
RE-
7. as to TAXES
7. The usufructu- 7. The lessee genary pays for the
erally pays no
annual charges
taxes.
and taxes on the
fruits.
8. a s t o o t h e r
things
8. A usufructuary 8. The lessee canmay lease the
not constitute a
property itself to
usufruct on the
another. (See Art.
property leased.
572).
575
Art. 563
CIVIL CODE OF THE PHILIPPINES
Art. 563. Usufruct is constituted by law, by the will of
private persons expressed in acts inter vivos or in a last will
and testament, and by prescription.
COMMENT:
(1) Classification of Usufruct as to ORIGIN
(a)
LEGAL (created by law). (Example: Usufruct of parents
over the property of their unemancipated children. (Art.
321.) Such usufruct cannot, because of family reasons, be
mortgaged or alienated by the parents. (See TS, July 7,
1892; TS, Sep. 27, 1893).
(b)
VOLUNTARY (or CONVENTIONAL)
1)
Created by will of the parties INTER VIVOS (as by
contract or donation). (Example: when an owner sells
or alienates the usufruct.)
[NOTE: If this is created by sale or for any valuable consideration, the Statute of Frauds applies,
always in the case of real property; and in the case
of personal property, if the value is P500 or over.
(See Art. 1403, par. 2{e}.].
2)
Created MORTIS CAUSA (as in last will and testament).
[NOTE: The formalities of a will or codicil must
be complied with, either notarial or holographic.].
(c)
MIXED (or PRESCRIPTIVE)
Created by both law and act of a person. Example
of usufruct acquired by prescription: I possessed in good
faith a parcel of land which really belonged to another.
Still in good faith, I gave in my will to X, the naked ownership of the land and to Y, the usufruct. In due time, Y may
acquire the ownership of the USUFRUCT by acquisitive
prescription. (Manresa).
(2) Requirements Must Be Complied With
To constitute a valid usufruct, all the requirements of the
law must be complied with.
576
CIVIL CODE OF THE PHILIPPINES
Art. 564
(3) Registration of Usufruct over Real Property
A usufruct over real property, being a real right, must be
duly registered in order to bind innocent third parties. (Art.
709, Civil Code).
Art. 564. Usufruct may be constituted on the whole or
a part of the fruits of the thing, in favor of one or more persons, simultaneously or successively, and in every case from
or to a certain day, purely or conditionally. It may also be
constituted on a right, provided it is not strictly personal or
intransmissible.
COMMENT:
(1) Classification of Usufruct According to Quantity or Extent (of Fruits or Object)
(a)
as to fruits — total or partial (depending on whether all
the fruits are given or not).
(b)
as to object — universal (if over the entire patrimony) (Art.
598) or singular or particular (if only individual things
are included).
(2) Classification of Usufruct as to the Number of Persons
Enjoying the Right
(a)
Simple — if only one usufructuary enjoys
(b)
Multiple — if several usufructuaries enjoy
1)
simultaneous — (at the same time)
2)
successive — (one after the other)
BUT in this case, if the usufruct is created by
donation, all the donees must be alive, or at least
already conceived, at the time of the perfection of the
donation (Art. 756); and in the case of testamentary
succession, there must only be two successive usufructuaries; moreover, both must be alive or at least
conceived at the time of the testator’s death. (See
Arts. 863 and 869).
577
Art. 564
CIVIL CODE OF THE PHILIPPINES
(3) Classification of Usufruct as to the QUALITY or KIND
of OBJECTS Involved
(a)
usufruct over RIGHTS. (The right must not be strictly
personal or intransmissible in character, hence, the right
to receive present or future support cannot be the object of
a usufruct). (A usufruct over a real right is also by itself
a real right.)
(b)
usufruct over THINGS
1)
NORMAL (or perfect or regular) USUFRUCT: This
involves non-consumable things where the form and
substance are preserved.
2)
ABNORMAL (or imperfect or irregular) USUFRUCT:
[Examples: Usufruct over consumable property,
like vinegar or money. This is also called quasi-usufruct (See Alunan v. Veloso, 52 Phil. 545); usufruct
over non-consumable things that gradually deteriorate by use. Example: the usufruct over furniture or
over an automobile; the usufruct over sterile or unproductive animals. (See Art. 591 — which provides
that as to effects, a usufruct on sterile animals is to
be considered a usufruct over consumable or fungible
things.).].
(4) Classification of Usufruct According to Terms or Conditions
(a)
Pure usufruct — (no term or condition)
(b)
With a term or period (“a termino”)
(c)
1)
ex die — from a certain day
2)
in diem — up to a certain day
3)
ex die in diem — from a certain day up to a certain
day
With a condition (conditional)
578
CIVIL CODE OF THE PHILIPPINES
Art. 565
Art. 565. The rights and obligations of the usufructuary
shall be those provided in the title constituting the usufruct;
in default of such title, or in case it is deficient, the provisions
contained in the two following Chapters shall be observed.
COMMENT:
(1) Rules Governing a Usufruct
(a)
First, the agreement of the parties or the title giving
the usufruct (thus, by agreement, the usufructuary may
be allowed to alienate the very thing held in usufruct
although generally, this alienation is not allowed by the
codal provisions).
(b)
Second, in case of deficiency, apply the Civil Code.
(2) Rule in Case of Conflict
In case of conflict between the rights granted a usufructuary by virtue of a will, and codal provisions, the former, unless
repugnant to the mandatory provisions of the Civil Code, should
prevail. (Fabie v. Gutierrez David, 75 Phil. 536).
(3) Naked Ownership of an Ecclesiastical Body
The naked ownership of properties endowed to a chaplaincy belongs to the proper ecclesiastical authority within
whose jurisdiction such properties are found. (See Trinidad v.
Roman Catholic Bishop of Manila, 63 Phil. 881).
579
CIVIL CODE OF THE PHILIPPINES
Chapter 2
RIGHTS OF THE USUFRUCTUARY
Art. 566. The usufructuary shall be entitled to all the
natural, industrial and civil fruits of the property in usufruct.
With respect to hidden treasure which may be found on the
land or tenement, he shall be considered a stranger.
COMMENT:
(1) Fruits to which a Usufructuary is Entitled
The usufructuary is entitled to the natural, industrial,
and civil fruits that will accrue during the existence of the
usufruct. (Regarding pending fruits at the beginning and end
of the usufruct, see the next article.).
(2) Dividends of Corporations
A dividend (whether in the form of cash or stock) is income
or civil fruits and should belong to the usufructuary and not to
the remainderman (naked owner). This is because dividends
are declared out of corporate profits, not corporate capital (the
“corpus”). Dividends declared out of the capital are seriously
prohibited by the law. (See Bachrach v. Seifert and Elianoff,
87 Phil. 483; See also Orozco and Alcantara v. Araneta, et al.,
L-3691, Nov. 21, 1951).
Incidentally, stock dividends may be sold independently
of the original shares just as the offspring of an animal may be
alienated independently of the parent animal. (See Bachrach
v. Seifert, supra).
580
CIVIL CODE OF THE PHILIPPINES
Art. 567
Bachrach v. Seifert and Elianoff
87 Phil. 483
FACTS: E.M. Bachrach gave to Mary MacDonald Bachrach the usufruct of his estate, among the properties of which
were 108,000 shares of stock of the Atok Big Wedge Mining
Co., Inc. When the company declared a 50% stock dividend
(54,000 shares), Mary wanted said dividend-shares transferred
in her name, alleging that although they were in the form of
stocks, they were nevertheless still fruits and income, and as
usufructuary, she was entitled to them. The other heirs of E.M.
Bachrach, on the other hand claimed that the stock dividends
were not income or fruits, and that they instead formed part
of the capital; hence, that Mary was not entitled to them.
HELD: They are fruits or income, and therefore, they
belong to Mary, the usufructuary. Moreover, dividends cannot
be declared out of the capital.
(3) Products Which Diminish the Capital
Generally, products which diminish the capital (like
stones from stone quarries) cannot, for that reason, be considered fruits, unless a contrary intent between the parties is
clear.
(4) Share of Usufructuary Re Hidden Treasure
The law says that “as to hidden treasure which may be
found on the wall or tenement, he (the usufructuary) shall be
considered a stranger.” What does this mean?
ANS.: This means that the usufructuary, not being the
landowner, is not entitled as owner, but is entitled as finder (to
one-half of the treasure, as a rule, unless there is a contrary
agreement) if he really is the finder. If somebody else is the
finder, the usufructuary gets nothing. (See 4 Manresa 386387).
Art. 567. Natural or industrial fruits growing at the time
the usufruct begins, belong to the usufructuary.
Those growing at the time the usufruct terminates, belong to the owner.
581
Art. 567
CIVIL CODE OF THE PHILIPPINES
In the preceding cases, the usufructuary, at the beginning of the usufruct, has no obligation to refund to the owner
any expenses incurred; but the owner shall be obliged to reimburse at the termination of the usufruct, from the proceeds
of the growing fruits, the ordinary expenses of cultivation,
for seed, and other similar expenses incurred by the usufructuary.
The provisions of this article shall not prejudice the
rights of third persons, acquired either at the beginning or
at the termination of the usufruct.
COMMENT:
(1) Pending Natural or Industrial Fruits
This Article refers to PENDING NATURAL OR INDUSTRIAL fruits (there can be no pending civil fruits or rents, for
they accrue daily). (Art. 569).
(2) Rules
(a)
Fruits pending at the BEGINNING of usufruct:
1)
belong to the usufructuary;
2)
no necessity of refunding owner for expenses incurred, (for the owner gave the usufruct evidently
without any thought of being reimbursed for the
pending fruits, or because the value of said fruits
must already have been taken into consideration in
fixing the terms and conditions of the usufruct, if
for instance, the usufruct came about because of a
contract);
3)
BUT without prejudice to the right of third persons.
(Thus, if the fruits had been planted by a possessor
in good faith, the pending crop expenses and charges
shall be pro-rated between said possessor and the
usufructuary). (See Art. 545). (See also 4 Manresa
392).
582
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 568
Fruits pending at the TERMINATION of usufruct:
1)
Belong to the OWNER;
2)
BUT the owner must reimburse the usufructuary
for ordinary cultivation expenses and for the seeds
and similar expenses, from the proceeds of the fruits.
(Hence, the excess of expenses over the proceeds
need not be reimbursed.)
3)
Also, rights of innocent third parties should not be
prejudiced. (See No. [3] of [a], supra; also Arts. 545
and 567).
Art. 568. If the usufructuary has leased the lands or
tenements given in usufruct, and the usufruct should expire
before the termination of the lease, he or his heirs and successors shall receive only the proportionate share of the rent
that must be paid by the lessees.
COMMENT:
(1) Rule When Usufructuary Leases Property to Another
As a rule, the lease executed by the usufructuary should
terminate at the end of the usufruct or earlier (Art. 572), except
in the case of leases of rural lands, because in said case, if the
usufruct ends earlier than the lease, the lease continues for
the remainder of the agricultural year. (Ibid.)
Example: In 2002, A gave his land in usufruct to B for 4
years. B leased the land in favor of C for 8 years. Ordinarily,
the lease should end in 2006, because at that time, the usufruct ends. BUT if the naked owner so desires, he may allow
the lease to continue for 4 more years. The rent of the first
four years belongs to the usufructuary; that for the remaining
four belongs to the naked owner. (Art. 568). (See 4 Manresa
396-397). Whether the rents consist of money or goods is immaterial, the important thing is that the rents constitute civil
fruits. (See 4 Manresa 396-397).
[NOTE: It is not the naked owner, but the usufructuary
who has the right to choose the tenant. (Fabie v. David, 75
Phil. 536).].
583
Art. 569
CIVIL CODE OF THE PHILIPPINES
Fabie v. David
75 Phil. 536
FACTS: Juan Grey was the administrator of certain
premises, and Fabie was the usufructuary. Fabie leased the
property to David, but when David violated certain conditions
of the lease, Fabie brought an action of unlawful detainer
against him. Grey intervened in this action, and alleged that
he, and not the usufructuary, had the right to select the tenants; and that therefore, Fabie had no right to institute the
suit. ISSUE: Who can select the tenants — Grey, the administrator; or Fabie, the usufructuary?
HELD: Fabie, the usufructuary, has the right because a
usufructuary is allowed to administer and manage the property,
to collect rents and to make the necessary repairs. Included in
this right to administer is the right to select the tenant over
the premises, presently held by Fabie in usufruct.
(2) Problem
A leased his land to B, and before the expiration of the lease,
A gave the usufruct of his land to C. Can C oust tenant B?
ANS.: No, because Art. 1676 (applicable to a purchaser of
the whole property) cannot apply, the usufructuary not having
the jus disponendi over the property. (See 4 Manresa 397-398).
A contrary agreement among the three of them will of course be
allowed. Nevertheless, the usufructuary, instead of the naked
owner, would be entitled to the rents for the duration of the
usufruct. (See Art. 566).
Art. 569. Civil fruits are deemed to accrue daily, and
belong to the usufructuary in proportion to the time the
usufruct may last.
COMMENT:
Ownership and Accrual of Civil Fruits
The Article explains itself. Because of the daily accrual,
Art. 567 cannot apply.
584
CIVIL CODE OF THE PHILIPPINES
Art. 570
Art. 570. Whenever a usufruct is constituted on the right
to receive a rent or periodical pension, whether in money or
in fruits, or in the interest on bonds or securities payable to
bearer, each payment due shall be considered as the proceeds
of fruits of such right.
Whenever it consists in the enjoyment of benefits accruing from a participation in any industrial or commercial
enterprise, the date of the distribution of which is not fixed,
such benefits shall have the same character.
In either case they shall be distributed as civil fruits, and
shall be applied in the manner prescribed in the preceding
article.
COMMENT:
(1) Rule as to Certain Rights (Rent, Pension, Benefits,
Etc.)
The things referred to in Art. 570 are considered civil
fruits and shall be deemed to accrue proportionately to the naked owner and usufructuary, for the time the usufruct lasts.
Examples:
(a)
A gave to B in usufruct the profits of a certain factory for 10 years. If the usufruct lasts really for 10
years, all profits during that time must go to B.
(b)
Suppose, however, B died at the end of 5 years, and
the following were the profits of the factory:
2nd year
3rd year
8th year
10th year
—
—
—
—
P30
P50
P10
P20
million
million
million
million
[NOTE: A business enterprise may sometimes have
a profit; at times, may incur a loss; and in the case of
profits — these may be irregular.].
How should the profits be divided?
ANS.: It is UNFAIR to give the heir of the usufructuary P80 million (2nd and 3rd year’s profits) and only P30
585
Art. 570
CIVIL CODE OF THE PHILIPPINES
million (8th and 10th year’s profits) to the naked owner.
If this were so, we would be applying the rule for industrial or natural fruits, not civil fruits. It is indeed unfair
because a business is expected to have its ups and downs.
Therefore, considering that the usufruct was supposed
to last for 10 years (though it actually lasted for only 5
years), it is fairer to give half of the total profits to the
heirs of the usufructuary, and half to the naked owner.
[NOTE: Similarly, if during the first five years,
no profits were realized because the company came out
even, and profits came only after the last five years, the
rule set forth above should be followed, otherwise gross
injustice would result since it is well-known that it takes
a company sometime before it becomes a gaining proposition. Of course, the parties can stipulate otherwise in
their contract, but in the absence of stipulation, Art. 570
should apply. (See 4 Manresa 393-395).].
(2) Rule When Date of Distribution of Benefits is Fixed
In speaking of benefits from industrial or commercial
enterprises, the law says, “the date of distribution of which is
not fixed.” Does this mean that if the date is fixed, Art. 570
does not apply?
ANS.: No. Art. 570 applies whether or not the date of distribution is fixed. The law does not mention anymore the case
when the date is fixed because this after all is the usual state
of things, and the rule enunciated in Art. 570 clearly applies.
Whether or not, however, Art. 570 applies to a case where the
date is not fixed was doubtful before, hence, the necessity of an
express provision on the subject. (See 4 Manresa 393-395).
(3) Stock Dividends and Cash Dividends
Our Supreme Court has ruled that both stock dividends
and cash dividends are civil fruits. (Orozco and Alcantara v.
Araneta, L-3691, Nov. 21, 1951). The same rule should apply
to profits of a partnership.
586
CIVIL CODE OF THE PHILIPPINES
Art. 571
(4) Example With Respect to Rents
If A gives B the usufruct of A’s land, and A’s land is being
rented by C, each payment of rent shall go to B for the duration
of the usufruct, each payment being considered as part of the
proceeds of the property.
Art. 571. The usufructuary shall have the right to enjoy any increase which the thing in usufruct may acquire
through accession, the servitudes established in its favor,
and, in general, all the benefits inherent therein.
COMMENT:
(1) Increases in the Thing Held in Usufruct
Aside from the right to the fruits (already discussed), the
usufructuary has the right to the enjoyment (use, not ownership) of:
(a)
accessions (whether artificial or natural),
(b)
servitudes and easements,
(c)
all benefits inherent in the property (like the right
to hunt and fish therein, the right to construct rain
water receptacles, etc.). (See 4 Manresa 413-415).
(2) Reason
The usufructuary, as a rule, is entitled to the:
(a)
ENTIRE jus fruendi (including fruits of accessions)
(b)
ENTIRE jus utendi (so he can make use for example of
an easement).
(3) Query
If co-owners of a parcel of land will give its usufruct to
a relative, and subsequently they build a house thereon and
leases the same to others, will the rents go to the co-owners or
to the usufructuary?
ANS.: To the co-owners, because this is the evident intent
of the parties.
587
Art. 572
CIVIL CODE OF THE PHILIPPINES
Art. 572. The usufructuary may personally enjoy the
thing in usufruct, lease it to another, or alienate his right of
usufruct, even by a gratuitous title; but all the contracts he
may enter into as such usufructuary shall terminate upon
the expiration of the usufruct, saving leases of rural lands,
which shall be considered as subsisting during the agricultural year.
COMMENT:
(1) Rights with Reference to the THING ITSELF (in Addition to the Usufruct)
(a)
He may personally enjoy the thing (that is, entitled to
possession and fruits).
[NOTE: The enjoyment may also be thru another
unless the contrary has been provided or stipulated.].
(b)
He may lease the thing to another. (This can be done
even without the owner’s consent; moreover, ordinarily
the lease must not extend to a period longer than that of
the usufruct, unless the owner consents. Thus, the lease
ends at the time the usufruct ends, except in the case of
rural leases.).
[NOTE: If the lessee should damage the property,
the usufructuary shall answer to the owner. (Art. 590).
The relation between the owner and the usufructuary,
does not end just because a lease has been made. The
usufructuary, however, can demand reimbursement from
the lessee, because of the latter’s breach of the contract of
lease. If the usufructuary cannot pay the damage to the
naked owner, his bond shall be liable. This is precisely one
reason for the requirement of a bond. (See Art. 583).].
(2) Rights with Reference to the USUFRUCTUARY RIGHT
ITSELF
(a)
He may alienate (sell, donate, bequeath, or devise) the
usufructuary right (except a legal usufruct, i.e., the
usufruct which parents have over the properties of their
unemancipated children, because said usufruct is to be
588
CIVIL CODE OF THE PHILIPPINES
Art. 572
used for certain obligations towards children) (See TS,
Sep. 27, 1893); or a usufruct granted a usufructuary in
consideration of his person (4 Manresa 375); or a usufruct
acquired thru a caucion juratoria, for here, the need of
the usufructuary himself is the reason for the enjoyment.
(See Art. 587).
(b)
He may pledge or mortgage the usufructuary right (because he OWNS said right) BUT he cannot pledge or
mortgage the thing itself because he does not own the
thing. (See Art. 2085[2]). Neither can he sell or in any
way alienate the thing itself, or future crops, for crops
pending at the termination of the usufruct belong to the
naked owner. (Art. 567). (See also Art. 572 and Mortgage
Law, Art. 106).
[NOTE: Parental usufruct cannot be alienated or
pledged or mortgaged. (See TS, July 7, 1892).].
(3) Cases
Fabie v. David
75 Phil. 536
FACTS: In his will, A made B administrator of his estate,
but gave to C the usufruct of a particular house. D was occupying the house as tenant. For violation of the lease contract, D
was being ejected by C, the usufructuary. D said that C was
merely the usufructuary, and was entitled only to collect rent
but had no right to select and oust tenants, this being the right
of B, the general administrator of A’s estate. ISSUE: Has C
the right to bring the action?
HELD: Yes. While it is true that there was a general
administrator (B), still insofar as that particular house is
concerned, C should be considered the administrator. This is
because as usufructuary, he is entitled not only to collect the
rent or income but also to lease the property in favor of another.
(Art. 572). And this right to lease carries with it the right to
select and oust tenants for contractual violations. To permit
B to arrogate unto himself the right to select tenants, dictate
the conditions of the lease, and to sue when the lessee fails to
589
Art. 573
CIVIL CODE OF THE PHILIPPINES
comply therewith would be to place the usufructuary C at his
mercy. This should not be allowed.
Seifert v. Bachrach
79 Phil. 748
FACTS: A donated her usufructuary right over certain
properties. Later, she brought an action to get her right back
on the ground that she did not own the properties. Will the
action prosper?
HELD: No, for after all, she donated the usufruct (which
belonged to her) and not the properties themselves. And under
the law, the usufructuary has the right to alienate (even by
gratuitous title, as in this case) the right to the usufruct. It
has been proved that the donation was made knowingly and
freely. She deserves commendation for the beauty of her act in
donating. Charity is the choicest flower of the human spirit. We
are not willing to help her withdraw now what she had given
voluntarily, and in a noble spirit of liberality.
Art. 573. Whenever the usufruct includes things which,
without being consumed, gradually deteriorate through wear
and tear, the usufructuary shall have the right to make use
thereof in accordance with the purpose for which they are
intended, and shall not be obliged to return them at the
termination of the usufruct except in their condition at that
time; but he shall be obliged to indemnify the owner for any
deterioration they may have suffered by reason of his fraud
or negligence.
COMMENT:
(1) Abnormal Usufruct on Things that Deteriorate
This article deals with an ABNORMAL or imperfect
usufruct. It is true that ALL things deteriorate, but there are
some things that deteriorate much faster than others (such as
clothes, furniture, carriages, vehicles, computers, copiers, or
books).
590
CIVIL CODE OF THE PHILIPPINES
Art. 574
(2) Effect of the Deterioration on the Usufructuary’s
Liability
If these fast deteriorating things:
(a)
deteriorate because of NORMAL USE, the usufructuary
is not responsible. Therefore, he can return them in the
condition they might be in at the termination of the usufruct. There is no necessity for him to make any repairs
to restore them to their former condition (See 4 Manresa
430-431), for after all, they can be PRESERVED without
the necessity of repairs (as when the varnish of a chair
has disappeared). Failure to return the thing will result
in indemnification for the value the object may have at
the end of the usufruct. (See 3 Sanchez Roman 569).
(b)
deteriorate because of an event or act that endangers their
preservation (as when by fortuitous event, lightning splits
a table into three pieces), then even though there was no
fault or negligence or fraud on the part of the usufructuary, he is still required, under Art. 592, to make the
NECESSARY OR ORDINARY REPAIRS. (See 4 Manresa
430-431). Thus, mere deterioration thru normal use does
not require the ordinary repairs referred to in Art. 592.
(See 3 Sanchez Roman 585).
(c)
deteriorate because of fraud (dolo incidente or fraud
amounting to an EVASION of the obligation to preserve)
or NEGLIGENCE (culpa), the usufructuary is responsible.
(Art. 573). (Such liability may however be set off against
improvements.) (See Art. 580).
Art. 574. Whenever the usufruct includes things which
cannot be used without being consumed, the usufructuary
shall have the right to make use of them under the obligation of paying their appraised value at the termination of
the usufruct, if they were appraised when delivered. In case
they were not appraised, he shall have the right to return
the same quantity and quality, or pay their current price at
the time the usufruct ceases.
591
Art. 575
CIVIL CODE OF THE PHILIPPINES
COMMENT:
(1) Abnormal Usufruct on Consumable Things
This is another instance of abnormal usufruct, and is
sometimes referred to as a “quasi-usufruct” because the form
and substance is not really preserved. Thus, this is really a
SIMPLE loan. It has been included however in the title on usufructs because in what are called UNIVERSAL USUFRUCTS,
both non-consumable and consumable properties are included.
While we seldom find usufructs on consumable properties alone,
it is a fact that they indeed exist. Thus, the Supreme Court has
held that even money may be the object of a usufruct. (Alunan
v. Veloso, 52 Phil. 545; see 4 Manresa 432-433).
(2) RULES for this ‘QUASI-USUFRUCT’
(a)
The usufructuary (debtor-borrower) can use them (as if he
is the owner, with complete right of pledge or alienation).
(b)
BUT at the end of the usufruct, he must
1)
pay the APPRAISED value (if appraised when first
delivered)
2)
Or, if there was no appraisal, return same kind,
quality, and quantity OR pay the price current at
the termination of the usufruct (therefore not at the
original price or value).
Art. 575. The usufructuary of fruit-bearing trees and
shrubs may make use of the dead trunks, and even of those
cut off or uprooted by accident, under the obligation to replace them with new plants.
COMMENT:
(1) Usufruct on Fruit-Bearing Trees and Shrubs
(a)
Note the phrase “fruit-bearing trees and shrubs” replacing
“vineyards and olive orchards” used under the old Civil
Code but eliminated in view of their non-existence in the
Philippines.
592
CIVIL CODE OF THE PHILIPPINES
(b)
Art. 576
This is a SPECIAL usufruct.
(2) RIGHTS
The usufructuary can use (even for firewood, though he
is NOT the naked owner) the following:
(a)
dead trunks
(b)
those cut off or uprooted by accident
BUT he must REPLACE them with new plants (for indeed, he was not the naked owner).
(3) Other SPECIAL Usufructs
(a)
of periodical pension, income, dividends. (Art. 570).
(b)
of woodland. (Art. 577).
(c)
of right of action to recover real property, real right, or
movable property. (Art. 578).
(d)
of part of property owned in common. (Art. 582).
(e)
of the entire patrimony of a person. (Art. 598).
(f)
on a mortgaged immovable. (Art. 600).
(g)
on a flock or herd of livestock. (Art. 591).
Art. 576. If in consequence of a calamity or extraordinary event, the trees or shrubs shall have disappeared in
such considerable number that it would not be possible or it
would be too burdensome to replace them, the usufructuary
may leave the dead, fallen or uprooted trunks at the disposal
of the owner, and demand that the latter remove them and
clear the land.
COMMENT:
Effect of a Calamity on the Trees and Shrubs
Example:
A is usufructuary of trees and shrubs belonging to B.
As a result of an earthquake, many of the trees and shrubs
593
Art. 577
CIVIL CODE OF THE PHILIPPINES
disappeared or were destroyed. What are A’s rights and obligations?
ANS.:
(a)
(b)
If it is impossible or too burdensome to replace them, the
usufructuary has an OPTION. He —
1)
may use the trunks but should replace them (Art.
575);
2)
or may leave the dead, fallen, or uprooted trunks
at the owner’s disposal, and demand that the latter
remove them and clear the land. (Art. 576).
If it is slightly burdensome to replace them, the usufructuary MUST replace them (whether he uses the dead trunks
or not), and he cannot demand clearance of the land by
the owner. (See 4 Manresa 435-437).
Art. 577. The usufructuary of woodland may enjoy all
the benefits which it may produce according to its nature.
If the woodland is a copse or consists of timber for building, the usufructuary may do such ordinary cutting or felling
as the owner was in the habit of doing, and in default of this,
he may do so in accordance with the custom of the place, as
to the manner, amount and season.
In any case the felling or cutting of trees shall be made
in such manner as not to prejudice the preservation of the
land.
In nurseries, the usufructuary may make the necessary
thinnings in order that the remaining trees may properly
grow.
With the exception of the provisions of the preceding
paragraphs, the usufructuary cannot cut down trees unless
it be to restore or improve some of the things in usufruct, and
in such case he shall first inform the owner of the necessity
for the work.
594
CIVIL CODE OF THE PHILIPPINES
Art. 577
COMMENT:
(1) Special Usufruct over a WOODLAND
This is not a common or frequent usufruct because:
(a)
natural resources (including forest or timber lands) belong
to the State (Regalian Doctrine under Art. XII, Sec. 3 of
the 1987 Philippine Constitution);
(b)
a license is generally essential if one desires to gather
forest products. (See Sec. 47, Revised Administrative
Code).
(2) Obligations of the Usufructuary
In the enjoyment of the usufruct, the usufructuary:
(a)
must bear in mind that he is not the owner, and therefore,
in the exercise of the diligence in caring for the property
(required under Art. 589 he must see to it that the woodland is preserved, either by development or by replanting,
thus he cannot consume all, otherwise nothing would be
left for the owner. (See 4 Manresa 439).
(b)
in the cutting or felling of trees, he must —
1)
follow the owner’s habit or practices;
2)
in default thereof, follow the customs of the place (as
to MANNER, AMOUNT and SEASON) (Art. 577)
— all without prejudice to the owner, for while he
can USE, he cannot ABUSE. (See 4 Manresa 439).
[NOTE: The rule above is applicable if the woodland:
3)
(c)
a)
is a COPSE (thicket of small trees),
b)
or consists of timber for BUILDING.].
if there be no customs, the only time the usufructuary can CUT DOWN trees will be for REPAIR or
IMPROVEMENT, but here the owner must first be informed (the owner, thus, does not need to consent).
cannot alienate the trees (for the trees are not considered
fruits) unless he is permitted, expressly or impliedly by
595
Art. 578
CIVIL CODE OF THE PHILIPPINES
the owner (as when the purpose of the usufruct was really to sell the timber) or unless he needs the money to
do some repairs (but in the last case, the owner must be
informed). (See 21 Corpus Juris 950-951).
(3) BAR
A is the usufructuary of a parcel of land belonging to B. He
(A) transferred his usufructuary right to C who took possession
of the land. While possessing it, C, without the knowledge of
A, cut 100 coconut trees on the land. Is A liable to B, for the
damages caused by C, on the land under usufruct? Give your
reasons.
ANS.: Yes, A is liable to B, for a usufructuary (A) who
alienates his usufructuary right, is liable for the negligence of
his substitute (C). (Art. 590). It is clear that C had no right to
cut down the trees, for the article on woodland (Art. 577) cannot apply. There is a vast difference between a woodland and
coconut land. In the former, the usufructuary can in certain
cases cut down the trees precisely because the way to enjoy
the usufruct would be to convert the timber into lumber; in the
case of coconut land, the usufruct extends merely to the fruits
produced. At any rate, it would have been different had the
naked owner’s approval been obtained.
Art. 578. The usufructuary of an action to recover real
property or a real right, or any movable property, has the
right to bring the action and to oblige the owner thereof to
give him the authority for this purpose and to furnish him
whatever proof he may have. If in consequence of the enforcement of the action he acquires the thing claimed, the
usufruct shall be limited to the fruits, the dominion remaining with the owner.
COMMENT:
(1) Usufruct of an Action to Recover Through the Courts
This SPECIAL usufruct deals with the right to recover
by COURT ACTION:
596
CIVIL CODE OF THE PHILIPPINES
(a)
(b)
(c)
Art. 578
real property
personal property
real right over real or personal property
[NOTE: In a sense, this is a usufruct over an
expectancy or a hope.].
(2) What the Usufructuary Can Demand
To bring the action, the usufructuary can DEMAND from
the owner:
(a)
authority to bring the action (usually a special power
of attorney).
(b)
proofs needed for a recovery.
(3) How Third Parties Can Be Prejudiced
To prejudice third parties, the usufruct must either be
registered or known to them. (Art. 709).
(4) Institution of the Action
The action may be instituted in the usufructuary’s name,
for being the owner of the usufruct, he is properly deemed a
real party in interest. (See Sec. 2, Rule 3, Rules of Court).
(a)
If the purpose is the recovery of the property or
right, he is still required under Art. 578 to obtain
the naked owner’s authority.
(b)
If the purpose is to object to or prevent disturbance
over the property (once the property is given him),
no special authority from the naked owner is needed.
(See Pascual v. Angeles, 4 Phil. 604).
(5) Effect of Judgment
When judgment is awarded him and he gets the property:
(a)
its naked ownership belongs to the OWNER;
597
Art. 579
CIVIL CODE OF THE PHILIPPINES
(b)
its usufruct belongs to him (the USUFRUCTUARY).
(Art. 578, last part).
[NOTE: Usually, this usufruct occurs when a UNIVERSAL
USUFRUCT has been given. (See 4 Manresa 444).].
[NOTE: After successful suit, the usufruct is now over the
thing acquired.].
Art. 579. The usufructuary may make on the property
held in usufruct such useful improvements or expenses for
mere pleasure as he may deem proper, provided he does
not alter its form or substance; but he shall have no right
to be indemnified therefor. He may, however, remove such
improvements, should it be possible to do so without damage
to the property.
COMMENT:
(1) Useful and Luxurious Improvements
The usufructuary has the RIGHT (not the duty) to
make:
(a)
useful improvements;
(b)
luxurious improvements (for mere pleasure).
BUT —
(a)
He must not alter the form or substance of the property
held in usufruct (he cannot build a house if to do so would
destroy an orchard, if the usufruct is on an orchard, unless
the owner consents).
(b) He is NOT entitled to a REFUND (otherwise he might
improve the naked owner out of his property) (Castan), but he
may —
1)
either remove the improvements if no substantial
damage to the property in usufruct is caused (Art.
579);
2)
OR set off (compensate) the improvements against
damages for which he may be liable. (Art. 580).
598
CIVIL CODE OF THE PHILIPPINES
Art. 579
(2) Problems
(a)
If the improvement cannot be removed without substantial
injury, is the usufructuary entitled to a refund?
ANS.: No. (See Art. 579). But he may still avail
himself of the set-off. (Art. 580).
(b)
A usufructuary introduced useful improvements, which
he can remove without damage, but he does not want to
remove them. Can he be compelled by the naked owner
to make the removal?
ANS.: No, for the law says “may,” and therefore he
may or may not remove, the right being potestative (dependent on his will). (See 4 Manresa 445).
(c)
A usufructuary introduced useful improvements which he
can remove without damage. He wants to remove them,
BUT the owner wants to retain them, and offers to reimburse him. Who should prevail?
ANS.: The usufructuary prevails for the right of removal granted him by the law. The rule here is different
from that in Arts. 546 and 548, where the right to remove
may be defeated by the right of the owner to retain, upon
proper indemnification. (Arts. 546 and 548 refer to a possessor, not to a usufructuary). (See 4 Manresa 445).
(d)
On a parcel of land held by A in usufruct, A constructed
a building and planted some trees. Upon the termination
of the usufruct, may A destroy the building, and cut down
the trees?
ANS.: Yes, because he, after all, owned the improvements and he could thus remove them for the land would
not be injured. However, he must leave the land in the
way it had been before construction of the building and
planting of the trees. (See 4 Manresa 445-446).
(3) Registration of Improvements
Improvements made by a usufructuary belong to him, and
may therefore be registered, not independently, but in the registration proceedings of the land held in usufruct. The purpose
599
Art. 580
CIVIL CODE OF THE PHILIPPINES
of the registration is to protect him against third persons, for
while he cannot obtain a refund therefor, still he may remove
them or set them off against damages chargeable to him. (If the
property is sold to an innocent purchaser for value, the right
to remove the useful improvements since NOT REGISTERED
can not be enforced against said third person. [See Mella v.
Bismanos, CA, 45 O.G. 2099].).
(4) Usufructuary Compared With Possessor in Good Faith
While a possessor in good faith is entitled to a refund
for useful improvements, a usufructuary is not. (See Rivera v.
Trinidad, 48 Phil. 396).
[NOTE: Under the old Civil Code, a tenant or lessee was
also not allowed a refund and therefore was in the same position as a usufructuary because BOTH of them know that the
land is not theirs, but under the new Civil Code, the lessee
(not the usufructuary) is entitled to a refund of one-half. (See
Rivera v. Trinidad, supra; Castro v. Kiener Co., Ltd., 51 O.G.
5240; Art. 1678).].
Art. 580. The usufructuary may set off the improvements
he may have made on the property against any damage to
the same.
COMMENT:
(1) Right to Set-Off Improvements
See discussion under the preceding article.
(2) Rules
(a)
If damage exceeds the value of the improvements, usufructuary is still liable for the difference.
(b)
If the value of the improvements exceeds the damage, the
difference does not go to the usufructuary, but accrues
instead in the absence of a contrary stipulation in favor
of the naked owner, otherwise, it is as if the usufructu600
CIVIL CODE OF THE PHILIPPINES
Art. 581
ary would be entitled to a partial refund in cash. (See 4
Manresa 446).
(3) Requisites Before a Set-Off Can Be Made
(a)
The damage must have been caused by the usufructuary.
(b)
The improvements must have augmented the value of
property.
Art. 581. The owner of property the usufruct of which
is held by another, may alienate it, but he cannot alter its
form or substance, or do anything thereon which may be
prejudicial to the usufructuary.
COMMENT:
(1) Alienation by Naked Owner
Since the jus disponendi and the title (dominium directum) reside with the naked owner, he retains the right to
ALIENATE the property BUT —
(a)
he cannot alter its form or substance;
(b)
or do anything prejudicial to the usufructuary (as
when he should illegally lease the property to another, since this right ordinarily pertains to the
usufructuary).
(2) When Buyer Must Respect the Usufruct
A purchaser of the property must respect the usufruct in
case it is registered or known to him (See Art. 709), otherwise,
he can oust the usufructuary, who can then look to the naked
owner for damages. (See Art. 581).
(3) Rule in Case of Succession
If the naked owner bequeathes (if personal property) or
devises (if real property) to another thru a will, the legatee or
devisee should respect the usufruct. (See Art. 934, last paragraph).
601
Art. 582
CIVIL CODE OF THE PHILIPPINES
(4) Double Sale by Naked Owner
The naked owner is ordinarily not allowed to sell the usufruct to another after having sold it first to the usufructuary;
but if he does so, Art. 1544 relating to a double sale applies.
Thus, if the second buyer in good faith registers the usufruct,
he can oust the first buyer who did not register, even though
the latter be in possession. The right of the first usufructuary
would be to proceed against the naked owner for breach of the
warranty against eviction.
(5) Other Rights of the Naked Owner
Aside from the right of the naked owner to alienate the
property, he may also —
(a)
construct any works
(b)
and make any improvements
(c)
or make new plantings thereon if it be rural BUT
always, such acts must not cause:
1)
a decrease in the value of the usufruct;
2)
or prejudice the right of the usufructuary. (Art.
595).
Art. 582. The usufructuary of a part of a thing held in
common shall exercise all the rights pertaining to the owner
thereof with respect to the administration and the collection
of fruits or interest. Should the co-ownership cease by reason
of the division of the thing held in common, the usufruct of
the part allotted to the co-owner shall belong to the usufructuary.
COMMENT:
(1) Usufructuary of a Part of Common Property
A co-owner may give the usufruct of his share to another,
even without the consent of the others, unless personal considerations are present. (See Art. 493).
602
CIVIL CODE OF THE PHILIPPINES
Art. 582
The usufructuary in such a case takes the owner’s place
as to:
(a)
administration (management);
(b)
collection of fruits or interest. (Art. 582). (BUT not
as to alienation, disposition, or creation of any real
right over the property, since these are strict acts of
ownership, unless of course he is authorized by the
naked owner.).
(2) Effect of Partition
(a)
If there be a partition, the usufructuary continues to have
the usufruct of the part allotted to the co-owner concerned.
(Art. 582).
(b)
If the co-owners make a partition, without the intervention of the usufructuary, this is all right, and the partition
binds said usufructuary. (Pichay v. Querol, 11 Phil. 386).
Necessarily however, the naked owner must also respect
the usufruct. (Ibid.).
603
CIVIL CODE OF THE PHILIPPINES
Chapter 3
OBLIGATIONS OF THE USUFRUCTUARY
INTRODUCTORY COMMENT
(1) The usufructuary has obligations:
(a)
before the usufruct (like the making of inventory)
(b)
during the usufruct (like taking due care of property)
(c)
after the usufruct (like the duty to return and indemnify
in the proper cases).
(2) The naked owner has also corresponding obligations.
Art. 583. The usufructuary, before entering upon the
enjoyment of the property, is obliged:
(1) To make, after notice to the owner or his legitimate
representative an inventory of all the property, which shall
contain an appraisal of the movables and a description of
the condition of the immovables;
(2) To give security, binding himself to fulfill the obligations imposed upon him in accordance with this Chapter.
COMMENT:
(1) Obligation Re the Inventory and the Security
This article speaks of two obligations (inventory and
security). They are not necessary however before the right to
the usufruct begins; they are merely necessary before physical possession and enjoyment of the property can be had, thus
604
CIVIL CODE OF THE PHILIPPINES
Art. 583
if the usufructuary fails to give security (unless exempt) the
usufruct still begins but the naked owner will have the rights
granted him under Art. 586. (See 3 Sanchez Roman 574-575).
(2) Requirements for the Making of the Inventory
(a)
The owner (or his legitimate representative) must be
previously NOTIFIED (his presence or absence is not
important). (Purpose of notice: To enable him to correct
errors in the inventory; if he desires).
(b)
The condition of the IMMOVABLES must be described.
(c)
The movables must be appraised (in view of easy deterioration or loss).
(d)
As a rule, NO FORM is required except that when there
are real properties, Art. 1358 demands a public instrument to affect third parties.
(e)
Expenses are to be borne by the usufructuary, since the
duty is his. (4 Manresa 451-452).
(f)
Effect of not making inventory (except when excused)
— same as when the security is not given. (See Arts. 586
and 599; see also 3 Sanchez Roman 575-576).
(g)
When inventory is not required.
1)
When no one will be injured thereby (as in the case
of usufruct over a periodical pension or incorporeal right) (See Art. 570) provided the naked owner
consents, for the law says “may.” (Art. 585). (See 4
Manresa 464-467).
2)
In case of waiver by the naked owner or the law (See
4 Manresa 464-467), or when there is a stipulation
in a will or contract.
(3) The Giving of Security
(a)
Purpose: To insure faithful compliance of the duties of
the usufructuary (whether required during or at end of
the usufruct — like the duty to return). (See 4 Manresa
455-456).
605
Art. 584
CIVIL CODE OF THE PHILIPPINES
(b)
Form of Security — Since the law does not specify what
kind of security should be given, it follows that any kind
of sufficient security should be allowed — such as a cash
or personal bond, mortgage, etc.
(c)
When Security Is Not Required:
(d)
1)
When no one will be injured thereby (NO PREJUDICE). (See Art. 585). Example: in the usufruct over
a periodical income or life annuity. Provided naked
owner consents for the law says “may.” (Art. 585).
2)
When there is waiver by the naked owner (See 4
Manresa 464-465), or there is a stipulation either
in a will or by contract.
3)
When the usufructuary is the donor of the property
(who has reserved the usufruct). (The naked owner
should be grateful enough not to require the security). (Art. 584).
4)
When there is a parental usufruct (that is, in the
case of parents who are usufructuaries of their children’s property, except when the parents contract
a second or subsequent marriage, PROVIDED that
each child’s property does not exceed P50,000 in
which case, the parents have to file a bond (See Art.
225, the Family Code) not as usufructuary, but as
guardian or administrator.
5)
When there is a caucion juratoria, which takes the
place of a bond, and is made by taking an oath to
fulfill properly the duties of a usufructuary, BUT this
is available only under the conditions prescribed in
Art. 587 (promise under oath).
Effect of not giving Security:
(See Arts. 586 and 599).
Art. 584. The provisions of No. 2 of the preceding article
shall not apply to the donor who has reserved the usufruct
of the property donated, or to the parents who are usufructuaries of their children’s property, except when the parents
contract a second marriage.
606
CIVIL CODE OF THE PHILIPPINES
Art. 585
COMMENT:
Usufruct of Donor or of Parents
(a)
See discussion under the preceding article.
(b)
Note that the law says donor, not seller (for sale is an
onerous contract).
(c)
While the law says “donor,” the word “remitter” can also
be used, for “remission” is gratuitous.
(d)
The formalities of “donation” or “remission” must be complied with.
(e)
“Second” marriage may be “third, fourth, etc.” or any
subsequent marriage, as the case may be.
(f)
In case of “remuneratory” (with a future burden) donation,
the parties may stipulate on the necessity of a security.
(See 4 Manresa 460).
Art. 585. The usufructuary, whatever may be the title
of the usufruct, may be excused from the obligation of making an inventory or of giving security, when no one will be
injured thereby.
COMMENT:
Effect if No One Will Be Injured
(a)
See discussion under Art. 583.
(b)
The law says “may,” therefore the usufructuary is not
always excused, the exemption being dependent on the
naked owner. In case the naked owner refuses to make
the exemption, appeal can be had before the courts, and
the judge should consider all the circumstances in deciding whether or not to give the grant. (See 4 Manresa
464-467).
(c)
While ordinarily, it is the naked owner who grants the
exemption, the grant may be made by somebody else authorized by said naked owner. (See 4 Manresa 466-467).
607
Art. 586
CIVIL CODE OF THE PHILIPPINES
Art. 586. Should the usufructuary fail to give security
in the cases in which he is bound to give it, the owner may
demand that the immovables be placed under administration, that the movables be sold, that the public bonds, instruments of credit payable to order or to bearer be converted
into registered certificates or deposited in a bank or public
institution, and that the capital or sums in cash and the
proceeds of the sale of the movable property be invested in
safe securities.
The interest on the proceeds of the sale of the movables
and that on public securities and bonds, and the proceeds
of the property placed under administration, shall belong to
the usufructuary.
Furthermore, the owner may, if he so prefers, until the
usufructuary gives security or is excused from so doing, retain in his possession the property in usufruct as administrator, subject to the obligation to deliver to the usufructuary
the net proceeds thereof, after deducting the sums which
may be agreed upon or judicially allowed him for such administration.
COMMENT:
(1) Effects of Failure to Give Security (Unless Exempted)
(a)
On the Rights of the Naked Owner:
1)
He may deliver the property to the usufructuary
(since the article gives the owner a right, and not a
duty) (but even if delivery is made, the naked owner
may still later on demand the needed security). (TS,
Mar. 12, 1903).
2)
OR the naked owner may choose RETENTION of
the property as ADMINISTRATOR (here the usufructuary gets the net proceeds, minus administration
expenses, the amount of which is fixed by mutual
agreement or by the courts).
3)
OR the naked owner may demand RECEIVERSHIP
or ADMINISTRATION (by another) of the REAL
608
CIVIL CODE OF THE PHILIPPINES
Art. 586
PROPERTY, sale of movable, conversion or deposit of
credit instruments, or investment of cash or profits.
(b)
On the Rights of the Usufructuary:
1)
The usufructuary cannot possess the property till he
gives the security.
2)
The usufructuary cannot administer the property,
hence, he cannot execute a lease thereon. (4 Manresa
471-472).
3)
The usufructuary cannot collect credits that have
matured, nor invest them unless the Court or the
naked owner consents. (Art. 599).
[NOTE: This No. (3) applies also even if the
usufructuary is EXEMPTED from giving security.
(Art. 599).].
4)
But the usufructuary can alienate his right to the
usufruct (since failure to give the security did not
extinguish the usufruct). The grantee may of course
possess, the moment he gives security. (See 4 Manresa 471-472; see also Art. 603).
(2) Administration Expenses
The receiver or administrator (a third person) is entitled
naturally to administration expenses.
(3) Retention of Property by Naked Owner
Although the owner may demand the sale of movables
(public or private sale), still he may want to retain some of
them for their artistic worth or sentimental value, in which
case, he may demand their delivery to him provided he gives
security for the payment of legal interest on their appraised
value. (See Art. 587; see also 4 Manresa 468-470).
(4) Interest on Cash Proceeds of Sale
Note that if the movable be sold, the cash belongs to the
naked owner, but the interest thereon (6% per annum) belongs
to the usufructuary. (Art. 586, Second par.).
609
Art. 587
CIVIL CODE OF THE PHILIPPINES
Art. 587. If the usufructuary who has not given security
claims, by virtue of a promise under oath, the delivery of the
furniture necessary for his use, and that he and his family
be allowed to live in a house included in the usufruct, the
court may grant this petition, after due consideration of the
facts of the case.
The same rule shall be observed with respect to implements, tools and other movable property necessary for an
industry or vocation in which he is engaged.
If the owner does not wish that certain articles be sold
because of their artistic worth or because they have a sentimental value, he may demand their delivery to him upon
his giving security for the payment of the legal interest on
their appraised value.
COMMENT:
(1) ‘Caucion Juratoria’
The “promise under oath” is called a “caucion juratoria”
— a sworn du